This week saw two unrelated events, which point to an other interesting opportunity for Google to get themselves into financial hot water. The sudden demise, and likely associated jail terms with the demise, of what was neatly described as the PayPal of crime. Liberty Reserve was apparently the go to bank for drug cartels, child pornographers, and other evil types. Allegedly they laundered over six Billion dollars (roughly the GDP of Rwanda) before the Feds moved in to shut them down this week. At the center of the process was the anonymity they offered to their clientele, allowing them to ship money around the world securely and quickly. It’s the oldest game in the book, this time executed electronically on a grand scale.
The announcement coincided nicely with the announcement by Google that Gmail users can now attach money to an email and ship it to anyone else with an email account. The service is cheap (less than 3% service fee) or free if you have linked your bank account to your Gmail account. If you don’t want to link your account to your bank, you can attach a debit or credit card. This means that essentially anyone with the smarts to create a free and anonymous Gmail account and a stack of cash to load up a one time and anonymous debit card, can send cash anonymously to pretty much anyone anywhere… kinda like the good folk at Liberty Reserve. Obviously right out the box this isn’t the same as the money laundering on a massive scale, but if history teaches us anything it’s that any opportunity for nefarious exploitation, especially one that can be exploited at scale, will be. I wonder how Messrs, Brin, and Page will look in orange jump suits….