The Gold Blog

In a post 9/11 world, “due diligence” is constantly on the forefront—or at least we are expected to believe that. Although banks these days are preaching “due diligence,” it appears that at least one bank does not practice what it preaches. Monterey County Bank, based in Monterey California, http://www.montereycountybank.com that supports several card platforms for businesses providing prepaid debit card products for use on the internet and at atms, has missed the boat on “due diligence,” at the expense of those who entrusted it.

One of those businesses that it sponsors, Digital World Global Card, Inc., http://www.digitalworldcard.com , based out of New York, New York, is owned in full by sole shareholder Joseph Simon LaCroix, aka Joseph Simon, a convicted felon in the province of Ontario, Canada, according to Rowena McDougall, Senior Manager, Public Affairs, for the Financial Services Commission of Ontario (FSCO) .

On October 3, 2005 Joseph LaCroix, the sole officer and director of Digital World Financial, pleaded guilty to the charge of conducting the business of a loan and trust corporation without being registered in the province of Ontario. LaCroix was fined $50,000 and placed on probation for two years. As a condition of the probation LaCroix must pay approximately $2.2 million in restitution to depositors. Good luck on collecting that!

LaCroix also pleaded guilty to carrying on the business of insurance in Ontario without a licence and was fined $5,000. Seems Canada garners favor with criminals, as its criminal penalties certainly don’t seem to discourage crime.

For more on LaCroix’s convictions, see the following:

http://www.claimsurvey.com/english/pubs/news/2005/20051007-digitalworld.asp

http://www.fsco.gov.on.ca/english/pubs/news/2005/20051007-digitalworld.asp

http://www.ontarioinsurance.com/english/licensing/ceasedesistorders/cdo-digitalworld.asp

http://www.ontarioinsurance.com/english/pubs/bulletins/mebulletins/2006/g-03_06.asp

http://www.sfsc.gov.sk.ca/ssc/files/enforcementorders/2002_enf/temporary/digitalworldfinancialinc(temp)feb27-02.pdf

http://www.sfsc.gov.sk.ca/ssc/files/enforcementorders/2002_enf/extending/digitalworldfinancialinc(ext)mar13-02.pdf

http://www.fsco.gov.on.ca/English/licensing/ceasedesistorders/cdo-digitalworld.asp

Now, less than three years later, LaCroix’s Digital World Global Card, Inc. was shut down on April 1, 2008, by Monterey County Bank after LaCroix has allegedly misappropriated the funds of its many cardholders. Those cardholders had put their trust in Digital World Card, Inc. as well as Monterey County Bank—after all, if you can’t trust a bank, who can you trust? To add insult to injury, LaCroix had his staff to tell cardholders that their accounts were being audited by the bank, implying that they had somehow done something wrong. His staff has since become non-existant. Calls to the company (866) 878-8020 go directly to voice mail, and are not returned. Calls to LaCroix’s cell phone (347) 853-4746 went unanswered.

It should be noted that apparently all of LaCroix’s resellers were left out in the cold. It should also be noted that the ONLY cards affected are those that have the name Digital World Global Card at the top of the card – No others. Funds were sent to Digital World Card, Inc. for the benefit of cardholders, and instead, went to the benefit of LaCroix. In reported cases, LaCroix even emptied funds already on cardholders cards!

LaCroix’s site, Digital World Card, Inc., still maintains its website at http://www.digitalworldcard.com . Do Not Order From This Site! Do not become one of his victims! If the bank backing your prepaid debit card is Monterey County Bank, do your OWN due diligence!

Please remember that Monterey County Bank merely shut his program down on April 1, 2008. They offered absolutely NO COMPENSATION for their cardholders whatsoever. Do you think they would feel the same if you owed them money?

Remember, Buyer Beware!

While there is no recognized industry push for this type of card evolution, at least one proud individual in a manic burst of thinking, has published his 11 page ’spec’ on how to change the prepaid card industry.

It is entitled - Gift Cards, Post-Pay Style aka The End of Trading Money for Nothing - As I commented on his web, “It took a lot of guts to post this…”

“Tie a credit card or checking account to the gift-card, and only charge the account when your friend actually spends the card. Gift cards now become FREE, until they’re actually spent. It’s the American way: why pay now when you can pay later, with no finance charges to boot?”

Download the RTF

“Feed the live Tuna mayonnaise” the world needs idea-men and free thinkers.

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PayPal has just announced the launch of Mobile Checkout, a service allowing consumers in the U.S. , U.K. and Canada to buy items securely using cell phones and the mobile web. The partnership with GPShopper, the leader in mobile product search technology, enables PayPal users to search for products from PayPal merchants, see product descriptions, images and then buy products from their mobile phones.

Mobile Checkout is a simple payment mechanism for consumers on-the-go and merchants with online storefronts. From www.mobile.paypal.com, consumers click “Buy Something” where they then can find products they want to buy, see featured products, browse mobile stores, or find mobile storefronts over the mobile internet.

GPShopper has the only proven solution for enabling consumers to search and share products and promotions straight from their cell phone. Scaled to handle billions of products listed at millions of locations for millions of users any where in the world makes GPShopper a fantastic fit for PayPal.

Earlier this month Sprint and GPShopper announced the launch of Slifter, the first mobile local product search application that employs GPS technology to find products at neighboring retail locations.

PayPal earns its money by charging a transaction fee of 30 cents per transaction and up to 4.9 percent of the payment amount. With nearly 7,000 employees worldwide and plans to hire around 600 more this year PayPal is leading the way with stats like these:

• PayPal had 143 million accounts in March and expects to keep growing.
• PayPal accounted for $439 million of eBay’s $1.77 billion in just the last quarter.
• PayPal handled 177 million transactions worth $11.36 billion during the first quarter.

Source: 5W Public Relations

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In an interview on National Public Radio in the United States Benn Steil, an economist for the Council on Foreign Relations says most national currencies should be eliminated because they end up being manipulated by politicians, and do more economic harm than good.

It’s four minutes long and you can listen to it at NPR’s Internet site here: http://www.npr.org/ (http://www.gata.org/node/4692)

A long essay Steil wrote for the May/June issue of Foreign Affairs, “The End of National Currency,” can be found at that magazine’s site here: http://www.foreignaffairs.org/

“Benn Steil says most national currencies should be eliminated because they end up being manipulated by politicians, and do more economic harm than good.”

Who Is Benn Steil?

Senior Fellow and Director of International Economics

Award-winning writer, editor of International Finance, and cofounder of a transatlantic financial markets consultancy firm. Currently writing a book analyzing the historical relationship between money and national sovereignty and its importance in understanding contemporary globalization.

Expertise: Financial markets; securities trading; international finance.Experience: Cofounder and managing member, Efficient Frontiers LLC, financial markets consultancy (current); Editor, International Finance (current); member, European Shadow Financial Regulatory Committee (current); Director, International Economics Programme, Royal Institute of International Affairs (1992-98).

Source: Council On Foreign Relations

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This week marked an important date for the world of online gambling and online payments. Yesterday we moved past the 270 day deadline created by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Tuesday was a 9 month deadline the US Treasury was given to issue regulations for the Unlawful Internet Gambling Enforcement Act (UIGEA). While the new regulations are not expected to be published today or even this week, we might just see them this summer. However, it could take much longer.

This week, is also the first time I’ve seen headlines like, Gambling Sites Named in Terrorist Money Laundering Allegations, which directly link terrorists with online gambling money.

Right after the 271st day….how is that for a coincidence? Headlines are just now appearing that link money laundering & terrorist funding with online poker,

“…alleged that one of the men, Tariq Al-Dour, laundered thousands of dollars through online gambling sites including AbsolutePoker, Betfair, BetonBet, Canbet, Eurobet, NoblePoker and ParadisePoker” *

I suppose my own catchy blog headline from February may have had some truth to it, Online Gambling & Terrorist Financing: America’s New “Poker Threat”. Too bad my attitude in the post was so slanted, I’ll be eating crow on that one, no doubt. Arg…..the power of digital media.

Also this week the US Secret Service busted a major ring of credit card crooks, making millions on stolen credit cards. (good job USSS) Although, I found it very unusual how many of those headlines included “e-gold”. While none of the indictments in this credit card case included ANY mention or information** regarding e-gold, the Secret Service did not miss the opportunity mention e-gold, in their press release.

This same press release spawned over two dozen other articles and blog posts about e-gold. It brought e-gold’s prosecution back into the headlines. That small press release mention created new headlines like this one, All that is e-gold does not glitter. Most of the other articles, such as this one, Feds Bust Credit Card Counterfeiting Ring, which were anchored by the information in that press release, rehash the current e-gold investigation with at least one or two paragraphs.

While its common place for politicians, spin doctors and ‘hachet job‘ novice video editors like myself, to use digital media in an basic attempt to influence the public, I believe it should be a rare occasion when government agencies (besides the CIA) use media in any attempt to influence a pending legal matter. Shouldn’t court cases, stay in court and stand or fall on the merits of the case? Well….that’s America for you….OJ walked, Paris went to jail. Digital media, is a powerful tool and we all use on some level to influence others.

**Resources for this post included a Washington post blog.

Update 7/12: Now this is a fair article, exact same event with more credible facts and information:

Secret Service Busts Four Fraudsters With Ties To T.J. Maxx Attack

“However, E-Gold chairman Douglas Jackson disputes these charges and asserts that his company first brought Blinky to the attention of law enforcement in March 2006. Jackson told InformationWeek that investigators working for E-Gold began monitoring Blinky pursuant to an undercover operation it was conducting with law-enforcement agents from the U.S., U.K., and Russia. “In May 2006, working with records supplied by an exchange service that had sold him some E-Gold, we were able to supply general location (Miami), three confirmed phone numbers he used, and the usual IP/timestamp combos that even in this day and age are often useful,” Jackson said.”

Update 7/13: Another good one showing yet another side to this story….

Who’s Fighting Identity Theft? You’d Be Surprised

“But Douglas says it was his company that first brought Blinky to the attention of law enforcement in March 2006. Jackson told InformationWeek that investigators working for E-Gold began monitoring Blinky pursuant to an undercover operation it was conducting with law-enforcement agents from the U.S., U.K., and Russia.

“In May 2006, working with records supplied by an exchange service that had sold [Blinky] some e-gold, we were able to supply general location (Miami), three confirmed phone numbers he used, and the usual IP/timestamp combos that even in this day and age are often useful,” Jackson said. “In September 2006 we were able to set up a quasi-ambush where the guy was sent a Fed Ex package such that we were able to supply law enforcement with a specific physical location (a garage in Miami) and a time to nab him.”

Jackson sent me a copy of an e-mail exchange he claims to have had with a Secret Service contact in January 2006. In an e-mail Jackson ostensibly sent to the agency, he requested the Secret Service use information gathered by E-Gold investigators to crack down on a card-counterfeiting ring. An enthusiastic-sounding response from the agency informed Jackson his Secret Service liaison had made contact with “our guys at HQ and they will be in contact with you or your staff concerning this matter.” Jackson told me that E-Gold was later “rebuffed” by the Secret Service and doesn’t know if they followed up on the information he says he sent them.”

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