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Emily D. Swoboda

Q.& A. | Simon Dilloway

13 January 2009

With the help of a veteran financial crimes specialist, IGamingNews went inside the mind of an online criminal.

Simon Dilloway, former team leader of the London Metropolitan Police National Terrorist Financial Investigation Unit, is now retired from the police force and is heading up Lopham Consultancy. But for 30 years, Mr. Dilloway stood in the thick of some of the toughest terrorist attacks, including the July 2005 bombings in London's Undergound, which killed more than 50 people and injured 700.

He also investigated the worst in organized crime, he modestly acknowledged, and he promised to share a few of his war stories during his presentation at the Combating Cybercrimes in Betting and Gaming conference, Jan. 27, in London.

Mr. Dilloway described how money launderers commit online crimes and helped shed some light on whether online gambling could be a breeding ground for money laundering.

How real is the problem of money laundering in online gambling?

    As an outsider to the online gaming industry, the short answer is: I don't know. I don't know what the situation is regarding money laundering.

    However, I do know -- from a lot of experience in actually investigating money laundering and terrorist financing when I was a police officer -- that any form of vehicle for the movement of money or the cleaning of money will be attacked by money launderers, terrorist financers, especially as more regulation bites into the more established areas, if you take my meaning.

    I don't know about gaming sites particularly, but if they've got low odds -- so you've got a reasonable chance of return -- then that is an excellent way of cleaning money. Even taking a loss is part of it because it costs money to make money.

    Another thing that might be of interest is that a lot of people that were involved in the 7th of July bombings were members of casinos, despite the fact that Islam forbids gambling. And so you have to ask yourself why that is the case. Now, if they are members of traditional casinos, which I suspect may have more robust customer due diligence procedures, there is no reason why online casinos, which have a higher degree of anonymity, shouldn't be attacked as well.

How has money laundering in e-commerce evolved over the last 10 to 15 years as the Internet has grown?

    Well, the Internet, in terms of crime, has been a breeding ground and has grown a lot of bacteria really. Initially, the fraud aspect of things -- and the vulnerabilities of people and identity theft and so forth -- has burgeoned over the last few years. The Internet's also given money launderers an ideal anonymous way to move money about.

What are some of the techniques used to launder money on the Internet?

    There are things called e-money. There are things called e-metals. You can purchase value online and it's fairly easy to make that anonymous by perhaps using a mobile phone or a modem on an unregistered laptop, or perhaps a Hotmail or Yahoo account. It's very difficult to track down who these people are and [they] can actually transfer money into these online exchanges through money transfer businesses like Western Union and MoneyGram. And [then it] can be sold online and withdrawn by people around the world in a very short amount of time. So, the Internet is an absolute haven for money launderers and people who want to transfer money, whether they be terrorists or just ordinary criminals.

Can you tell me about what you do now?

    Well, varied things really, but it's all linked to compliance in the general term.

    I do work for the Council of Europe, the United Nations and the National Policing Improvement Agency in the U.K. [doing] capacity building for states that have recently come into the EU, for instance, to help them put their anti-money laundering regulations into some sort of shape. So, I go and travel around Eastern Europe, the Mediterranean and the Middle East doing that sort of work for them.

    I also, in the U.K., do some work with the regulated sector, particularly the newly regulated sector. In December 2008, the new anti-money laundering regulations went into force and they expanded those professionals who are subject to legal requirements and are meant to have anti-money laundering regimes and reporting regimes. They have no idea what to do because they have never been subject to it before.

    I'm also doing all sorts of training in terms of financial investigation and raising awareness of financial crime.

Has the downturn in the economy had any effect on the money laundering industry, as it were?

    Well, it's still a relatively new occurrence, isn't it? Just the last few months, really.

    I don't think it will l make any difference, to be honest with you. These are very good businessmen. I think a lot of legitimate businessmen could learn something from these guys because of the sophistication of their methods. Obviously, they can't use those methods.

    I guess we're back where we started because, although I don't know personally anything about the gaming industry online, they (cyber criminals) will use anything . They will seek out weaknesses. As soon as something gets difficult in one area they will start looking at other things for ways to make use of other systems and abuse other things. They are not a bank tied down by financial securities. They're not an insurance company dealing with insurance policies. They're not a manufacturer that has to make widgets. They are criminals who make their living through crime, and they launder the money whichever way is suitable for them and they move on.

Conference Spotlight: Combating Cybercrime in Betting & Gaming

Simon Dilloway will be presenting more on the topic of money laundering on January 27 at the CCBG conference in London.

Click here for more information on this event.

Q.& A. | Simon Dilloway is republished from
Emily D. Swoboda
Emily D. Swoboda