[choeger]

Not so much laundering the money, but rather obscuring the trail between the crime and the money. Laundering would come afterwards, I presume.

Ok, so to pull this of, you need to:

1. have one or more stolen credit cards (obviously not on your name)

2. sell a book under a false name and buy it with the stolen credit card

3. have a bank account somewhere either under the false name from 2. or under some other false name or with a bank that will never give out your real name

So the money is not "clean" because it now rests inside a bank account with a false name or a bank that does not cooperate with authorities. In any case it is still somewhat shady.

[gruez]

>1. have one or more stolen credit cards (obviously not on your name)

>2. sell a book under a false name and buy it with the stolen credit card

That probably won't work too well because you'll have a unusually high chargeback rate on your account which would lead to your account getting flagged. You also eat the charge of chargebacks so that will eat into your profits. This could work as a part of a larger money laundering scheme though. eg. you have cash from selling drugs and you want to clean them, so you buy amazon gift cards with it and then use them to buy your ebook. now you have a clean source of income (selling ebooks) that the IRS would be satisfied with.

[csomar]

I don't think IRS is your issue. (after all, the IRS taxes criminal income). His issue is access to the banking infrastructure, which can be difficult if he has lots of cash, or money sitting offshore. He might not even care about the IRS or the US, but just needs a "pass-through" to another entity.

[mywittyname]

How can the IRS be satisfied when someone else's identity is being used? It doesn't make sense because the launderer is still in possession of dirty, now stolen, money.

I'm guessing they are using the identify of "real" authors to bypass some kind of check Amazon has on new accounts selling books from unknown authors. Otherwise, what you're saying makes sense.

[gruez]

Not sure, maybe amazon doesn't require that the author be the same person as the entity selling the books (eg. LLC)? That way the IRS only really sees that Bob is getting his income from Bob's Books LLC, but unless they dig deeper they wouldn't know that Bob's Books LLC is impersonating Famous Writer.

edit: this is incorrect, see thread below.

[mywittyname]

But Bob isn't getting the tax bill, which is my point. The tax bill is going to Famous Writer, who is most certainly going to contest the bill, and will probably win. Now the IRS doesn't get their money, so they are not satisfied.

The whole idea behind money laundering is to actually pay the taxes on the ill-gotten gains to prevent you from being hit with charges relate to tax fraud, which are certain to stick.

The fact that they are operating in this manner indicates that they are not scared of the IRS, probably because they are not operating in the USA. Thus, the clearly system isn't designed for tax evasion purposes. They must have some other reason for operating in such a manner. The only thing I can think of is they are trying to bypass Amazon checks. Presumably they used to just create a fictitious LLC to do this under the name of a random name, but eventually were foiled by Amazon's automated systems, so they changed tactics.

[gruez]

>But Bob isn't getting the tax bill, which is my point. The tax bill is going to Famous Writer, who is most certainly going to contest the bill, and will probably win. Now the IRS doesn't get their money, so they are not satisfied.

Why would it go to Famous Writer? I skimmed the article and it only say the author on the product page is Famous Writer. If Famous Writer wrote it, but then signed over all the rights to Bob's Books LLC, then Famous Writer would be the author, but all the proceeds/tax bills will go to Bob's Books LLC.

As for why bother impersonating Famous Writer in the first place? Probably because an unheard of author selling $500,000 worth of books for $500/each would be suspicious, but if he was famous it would be less so.

[mywittyname]

> Why would it go to Famous Writer?

From the article:

> Reames said Amazon refuses to send him a corrected 1099, or to discuss anything about the identity thief.

The writer in question received a 1099, which states that he earned the proceeds from this book, and the IRS is going to require him to pay taxes on those earnings.

> As for why bother impersonating Famous Writer in the first place? Probably because an unheard of author selling $500,000 worth of books for $500/each would be suspicious,

The author says this book made much more than any of his other books:

> Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service.

They (the hackers) impersonated the author because they had access to his information via his publisher. Thus, they could bypass Amazon's normal vetting process for self-published books.

This is a terrible money laundering scheme (since it doesn't actually result in legitimate money), but it's a very good theft scheme.

[cortesoft]

Except the IRS thinks the impersonated author is making that income, not the person trying to launder money. This won't help them with the IRS.

[lmeyerov]

Sort of, especially if you can do a network of these.

Amazon is an Everything store, including more easily washed financial products like gift cards that companies normally avoid for these reasons. I bet they can use their proceeds to exchange for these.

I am curious if, by having a linked AWS account fueled by these, if there is a way to fully wash. E.g., bitcoin mining sets a super lossy floor.

(We do graph analytics, where mining webs of transactions & their meta data is super interesting. Funny behaviors like these pop out as weird and extreme looking topologies when looking at them :)

[leetcrew]

how do you wash a gift card? I would assume the original method of payment for the card is logged somewhere. unless you can turn around and sell the gift card for cash really quick, you would be stuck holding evidence.

[lmeyerov]

Yep, it's a time-sensitive market, as they're racing teams that will take days/weeks/months/never to catch up.

* Dark web resellers: "20-50% take for X cards at Y $ in Z time" => additional jumbling (drop shipping, ...) and exit points (discounted $ for anonymous purchases for/during illegal activities)

* Normal marketplaces: "$100 starbucks card, 10% off!"

* Sell to physical retailers like small corner stores

The approach & time will all impact % retained

Edit: Here's a fun one, esp. when you think through all the ground operations / people in the drug supply chain: https://losspreventionmedia.com/gift-cards-have-become-a-com... . We work with a lot of sec/fraud teams, where I've repeatedly heard the story "At $100M-1B revenue the finance wizards started a gift cards program, but it became such a pain point that we canceled it."

[arafa]

I agree, the title is misleading. This doesn't have the traditional hallmarks of money laundering since the scheme is mostly transparent and fradulent. It's really just a scam.