Money launder-gig

I’m always surprised – although I try not to show it – when people ask me how money laundering actually works, as there is an almost infinite number of ways in which criminals can move their money around.  Invent a new product or initiative, and within about twenty seconds the money launderers will be picking it apart to see how they can abuse it.  Witness the recent stories about criminals using Uber and Airbnb to launder their funds.

I have never used Uber (I know! Crazy! I love bicycles and trains!) but I am a dedicated fan of the Airbnb mini-city-break (with chocolate).  And I have wondered before about the fairness (and indeed safety) of a scheme that allows people to – in effect – run little hotels without having to bother with any of the tedious stuff that proper hotels have to do (fire escapes, checks on staff, booking guarantees, etc.).  But I will admit that I had not thought of the gig economy specifically as a money laundering risk – fool that I am.

This is how the system of “ghost rides” works on Uber:

  • The criminal recruits a dodgy Uber driver looking to make some easy money via the dark web
  • The driver pretends to take the criminal on a taxi ride
  • The criminal of course does not show up but pays for the ride with a stolen credit card
  • The Uber driver host keeps some of the money and wires the rest back to the criminal.

One variant of the Uber scheme is known as “acupuncture” because it involves a criminal overseas – usually in China or India – colluding with a driver by dropping location “pins” in the Uber application along the driver’s regular route.  The driver collects the fares as though he had really picked up passengers and then wires most of it back to the overseas criminal, known as the “nurse”.

As for Airbnb, hosts will answer ads on the dark web.  (For the scheme to work well, without arousing the suspicion of Airbnb, they should ideally be established hosts with a track history and good feedback.  But of course some such people do fall on hard times and are ripe for exploitation.)  Instead of hosting an actual guest, they simply take payment from a fake guest who never has any intention of showing up.  Once the payment is processed through Airbnb, the host refunds a portion of the nightly bill to the criminal who has recruited him – and who takes care to leave a positive review to satisfy Airbnb and to keep the host in business.  The only thing the host is laundering is money – no sheets or towels.

This entry was posted in Fraud, Money laundering, Organised crime and tagged , , , , , , , , , . Bookmark the permalink.

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