However, want to make it a loan instead of equity. Swinging
interest will be tight, but how can I say no when we're this close? 3/3/92 - Contractors
almost finished. GH came with the loan money today--in CASH! Said it
was only way to get money from other company. I felt like a criminal
walking around with all that cash, but hey, it's legal tender, right?
Quickly deposited it so I could pay contractors. 4/30/92 - Opening night!
The place is packed and I'm on top of the world. 7/30/92 - Three month
anniversary and still doing great. GH called to congratulate me.
During conversation, he let slip some comment about scandal at the
company funds came from. Must remember to ask more. 8/26/92 - Had lunch with
GM. Asked him about scandal GH mentioned. Previous company was a
shipping firm with business in Latin America. Company got mixed up
with transporting drugs with gray market goods. Closed down before
they got caught, but Primecor was able to recover cash. Said I should
probably know money was found in a storage locker with a stash of
illegal drugs. I feel very uncomfortable, but it's not like I did
anything illegal! 10/23/92 - Counting
receipts between lunch and dinner when 20 Treasury agents burst
through front door. They handcuff me and introduce me to AGENTS(?!)
GH and GM. They charge me with money laundering. There was no
Primecor. The whole thing has been a scheme to trap me.
We all hear about the wonders of the
Internet; how we will be able to do everything under the sun, from
shopping to entertainment, without ever leaving home.
But as commerce in Cyberspace grows, so
does the need for a new, more efficient form of payment. High speed
Web transactions slow down considerably, when vendors have to wait for
payment from credit card companies. And with hackers becoming ever
more sophisticated in their methods of stealing credit card numbers,
it's no wonder consumers still have much uneasiness about making
purchases on the Web.
Naturally, the financial realms of
cyberspace have solutions: new methods of payment which will promote
smooth, efficient transactions in the virtual world. The leading
development on this front is E-cash.
Electronic Cash or E-cash, is the
equivalent of an on-line bank account. Deposits of cash are made into
banks that convert the deposits into e-cash which can be used for
purchases from vendors willing to accept it. The main advantages are
prompt payment for the merchant and no looming credit card bill for
the consumer.
A win-win proposition for business and
consumers, right? Think again. E-cash still has its serious drawbacks
and risks.
Why money launderers are banking on
e-cash.
First, money launderers probably regard
the arrival of E-cash as the best thing since offshore banking. With
E-cash, launderers will find it easier than ever to convert cash from
illegal activities into anonymous funds. With no one to check the
nature of deposits made on-line, the money launderer can orchestrate
the transfer of funds from a remote location by modem, further hiding
the source of the cash. TELNET allows users to add another layer of
obscurity by directing the transfer through an anonymous account with
an on-line provider.
To law abiding businesses and consumers,
e-cash poses other concerns. Since e-cash is produced by private
vendors and is not officially considered cash by the government, it is
not insured by the FDIC. Moreover, the banks that issue it are not
subject to the same reporting requirements. While some of these banks
may voluntarily comply, there will be plenty of business for those
banks who choose not to comply, much as there is plenty of demand for
banks--offshore or otherwise--that don't ask questions.
Kessler's Corner
Drug traffickers using your business to
launder their dirty cash. Computer hackers accessing your company's
network to steal proprietary data. Who can tell where the next threat
to your corporate security will come from?
Doing business in the electronic age
demands that you make your company accessible to clients, shareholders
and potential customers virtually 24 hours a day. Yet, the more widely
you promote your business, the more you may compromise the security of
your organization's property and its ideas. The same technological
advances meant to help your business grow could be the very same
forces that undermine your success.
In this newsletter, we focus on two
areas of increasing concern to those responsible for corporate
security: money laundering and cybercrime. As federal regulators
attack money laundering in traditional banking institutions,
traffickers look more and more to non-banking businesses to clean
their dirty money. Meanwhile, the Internet has spawned a vast new
breed of cybercriminals capable of wreaking havoc on your computer
networks, and gaining unprecedented access to your protected
information with just a few keystrokes.
At Michael G. Kessler & Associates, we
know that experienced forensic accounting and investigative legwork is
still the best way to combat these crimes. Through our many years of
experience and continuous training, we have learned to uncover even
the most cleverly hidden schemes using the latest technology.
In addition to our unparalleled fraud detection services, we offer
proactive investigation consultation services designed to keep your
business free from the hazards and taint of associating--however
unwittingly--with today's sophisticated money launderers. And on the
cybercrime front, we offer comprehensive Internet monitoring services,
including our Web.sweep® program, to
protect your most valued assets including your copyrights, trademarks
and licensed properties and your reputation.
Thank you for joining us for another
issue of The Kessler Report. As always, we welcome your questions and
comments, especially your opinion as to whether the information
contained in this newsletter is helpful and useful to you. Please let
us know! We welcome your suggestions on topics for future issues,
too.
or
call us at (212)286-9100.
