I caught up late Tuesday afternoon with Douglas Jackson, the embattled head of online money transfer system e-gold, right before he was to board a plane to Washington D.C. to turn himself in to federal authorities, who have charged him with conspiracy to launder money.
Authorities allege Jackson and co-owners Reid Jackson, his brother, and longtime friend Barry Downey, knowingly operated a payment system that was used by cybercriminals.
Jackson didn’t sound like a man who is facing federal indictment that could land him in prison for 35 years. He sounded like the same former oncologist who has, in the past, stubbornly defended his decade-old company. He seemed in good spirits and was confident e-gold would prove victorious in court.
He told me e-gold is not in the business of helping cybercriminals funnel money across the globe – instead it’s a service set up to help the world’s poor who don’t have access to bank accounts or credit cards.
It also has the ability to avoid the natural – and volatile – ups and downs of an economy often moved by what policy makers say.
“This is the first monetary system where there is no element of discretion,” Jackson told me.
And although he said he wasn’t one for conspiracy theories, he thought the U.S. Secret Service had it out for e-gold.
But nobody can dispute the fact that e-gold makes it pretty darn easy for cybercriminals, whether they’re hawking child pornography or trojans, to anonmously move funds that can’t be cancelled.
Whether Jackson is innocent or guilty is not for me to speculate or decide on. But, the fact that e-gold was indicted speaks to a nationwide call for financial institutions to get out of reactive mode and into proactive mode when it comes to scrutinizing all transfers. As cybercrime continues to attract organized crime, the need for this will only grow. My fear is that there is always be a way for crooks to safely transfer money, whether it’s through another e-gold or using stolen credit cards.
As for Jackson, “The idea that we’re here to cater to the scum of the Earth, no, nobody that understands us could ever conceive such a thing,” he told me.
Thankfully for him, he’ll have his day in court.
Those who have been swindled by cybercrooks may never be so lucky.