Digital cash transfer outfit E-Gold has retained KPMG to help improve its anti-money laundering (AML) programme following a criminal case that saw directors plead guilty to charges relating to money laundering and the operation of an illegal funds transfer business.
In July E-Gold founder Douglas Jackson and senior directors Barry Downey and Reid Jackson pleaded guilty to charges filed in April 2007 by the US Department of Justice.
The indictment had alleged that E-Gold became a favoured method of payment by operators of investment scams, credit card and identity fraud, and sellers of online pornography. The charges accused the defendants of conducting fund transfers on behalf of customers while knowing that the funds involved were the proceeds of unlawful activity and thereby violated federal money laundering statutes.
The indictment further alleged that the defendants operated the E-Gold operation without a licence in the District of Columbia in violation of federal and state money transmitting laws.
As part of July's plea, the directors agreed the businesses would create a comprehensive money laundering detection programme, requiring verified customer identification, suspicious activity reporting and regular supervision by the Internal Revenue Services' bank secrecy act division.
The firm said it would hire a consultant to ensure their compliance with applicable law and appoint an auditor to verify claims that all transactions are fully backed by gold bullion.
E-Gold has now appointed KPMG and says it hopes to have made significantly enhancements to its AML programme within the next 30 to 60 days.
Says Douglas Jackson: "E-Gold is seeking to have one of the market's most effective anti-money laundering programmes."
But the men still face sentencing, which is due on 20 November. Douglas Jackson facing a maximum prison sentence of 20 years and a fine of $500,000 on the conspiracy to engage in money laundering charge. He also faces five years and a fine of $250,000 on the operation of an unlicensed money transmitting business charge.
Downey and Reid Jackson each face a maximum of five years in prison and a fine of $25,000 whilst E-Gold and Gold & Silver Reserve face a maximum fine of $3.7 million.