>> Selling everything from flags and fabrics, to duct tape and DVD cases, these online shops seem innocuous enough. But Reuters research into seven sites shows they are all fake, they actually sold no goods. Part of a multi-national system to disguise payments for the $40 billion global online gambling industry.
Reuters correspondent Alas Depal has been delving into the world of online shadow banking.>> It's the digital evolution of money laundering. So if you think about 30 years ago, if you wanted to set up a fake shop, you'd obviously have to buy the premises, you'd have to hire the staff, you'd have to buy the material for your shop.
But now it's just really a case of setting up an online shop.>> When a Reuters reporter made purchases on the seven dummy stores, no items were ever received. A few weeks later the payments were refunded without comment. In fact, these websites are not meant to be found by average members of the public.
They are suspected fronts for processing payments through a scheme known as transaction laundering, Reuters has found. Here´s how it works, gamblers in the US where online gambling is illegal in some states, use sites based in places like the Caribbean, which are out of the reach of US regulators.
The payment in this case is processed by Agora Online Services, a payment services provider headquartered in Iceland. But the gambling sites are setup so that the payment is processed as having being made in one of the seven dummy household goods sites, which all have addresses in two small towns the UK county of Durham.
Andre Brandt one of the two directors for Agora declined to comment. Credit card companies such as Visa and MasterCard require all online purchases to be coded, so they can see what type of transaction is being processed. If a purchase is illegal in a particular country, they can block it.
Transaction laundering is a way around such restrictions. And experts say transaction laundering amounts to serious misconduct and can be criminal.