PayPal money laundering is a big issue. There are many ways that people can misuse PayPal. Here are top 3 ways to get a prison sentence by involving yourself in this type of scheme.
Top 1 Way to Get Imprisoned: Financing Terror Through PayPal or eBay Money Laundering
An American-born U.S. citizen and ISIS operative got nearly $10,000 in a PayPal and eBay money laundering scheme. He allegedly “sold” computers over eBay for money over PayPal. This way, he got overseas payments by going outside of traditional financial institutions. Even more, these were fraudulent sales of computers over eBay. The man, Mohamed Elshinawy, might have been part of a global network to use the money for operational purposes. Consequently, Elshinawy received a sentence of 20 years in jail with 15 years of supervised release.
The scheme typically involves an unknown company disguising unknown goods with legitimate payments through a legitimate merchant. Furthermore, the authorities do not know, in these cases, that these goods are illicit goods. This scheme is transactional laundering. The cost estimate of this type of laundering is $200 billion annually in the U.S.
Top 2 Way to Get Imprisoned: Embezzling Funds from Someone Else’s PayPal Account, Laundering Them into Bitcoins
In what seems to be a bizarre scheme, a young man, Gabriele Pearson, who worked at an IT consulting company, embezzled funds from his client’s account. Pearson repeatedly remote logged into a series of computers that belonged to his IT company and the client. Hence, after the complex chain of logins, Pearson was able to embezzle PayPal funds. Then, he laundered them through an online game that has its own currency, called Linden Dollars. Furthermore, a player can withdraw the Linden Dollars into a PayPal account. Pearson laundered the embezzled PayPal funds into Linden Dollars and sold them for Bitcoins. Following this, Pearson received a sentence of 15 months in jail.
Top 3 Way to Get Imprisoned: Helping Launder Russian ‘Troll’ Money for an Election
According to Robert Mueller’s indictment of 13 Russians, members of a St. Petersburg ‘troll factory’ stole U.S. social security numbers and dates of birth. This is because they were looking to influence the 2016 U.S. election. Due to these fake IDs, these trolls were able to pay for their online ads using PayPal. Even more, these ads spread inflammatory info about the presidential candidates. Certainly, the fake IDs might be why Facebook and Twitter did not identify that these were Russian ads.
The owner of the site that helped steal bank account information, Richard Pinedo, received a sentence of 6 months in prison. According to Richard Pinedo’s lawyers, he did not foresee that providing this information would help his Russian ‘troll farm’ client interfere with the U.S. election.