Domain Manage

Domain names for money laundering and tax evasion ?

Discussion in 'General Board' started by domaingenius, Apr 5, 2005.

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  1. domaingenius

    domaingenius Well-Known Member

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    I was just wondering out loud how many domain names
    are bought and sold for money laundering or other
    nefarious purposes ?. Clearly .com at least (co.uk
    are harder) could be bought and sold without anyone ever
    ,really,knowing the name of the registrant.

    Another "beauty" of domains may be there "fluid"
    value which would allow for all sorts of tax breaks etc.

    DG
     
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    Acorn Domains Elite Member

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  3. bb99 United Kingdom

    bb99 Well-Known Member

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    I once read a story in the Yorkshire Post about the launch of Halifax's Intelligent Finance (ie IF.COM) quite a few years ago.

    I can't 100% remember the details, and no doubt someone on here will know more about it, but here is the outline:

    - They came up with the name...
    - Some git had already bought the domain name :p
    - Another clever bod said "Oh, let's just do a whois and send them an email"
    - All attempts at contact failed (phone, fax, email, registrar, etc)
    - They hired some "specialists"
    - Said specialists spend days/weeks/(and maybe months) with their team sat around a bank of PC screens pressing REFRESH on the if.com website over and over and over and over again.
    - Eventually the owner is roused, presumably by either his host, registrar or the bailiffs when they come round to collect the money for the bandwidth bill.
    - The owner then enters into negotiation
    - A fee of US$1m is agreed, but with some terms and conditions
    - Someone is sent over to the USA to do the deal, which involves handing over the money in a suitcase to a bloke in a park
    - The deal is done, and the domain is transferred.
    - And IF.COM was born.


    Quite how a venerable financial institution like The Halifax could get involved in something like that (the cash deal) is beyond me.

    Getting back to the original post though....

    I'd imaging that a lot of these deals are done for cash and, even if not, I doubt the Inland Revenue are aware of them.

    There is a lot of scope for money laundering, particularly given the very subjective nature of valuations. If you are accepting large cash payments then you are meant to register with HMCE as part of the new anti money laundering legislation.

    Agreed though, it's harder to do in the UK given Nominet's systems in respect of transfers.
     
  4. domaingenius

    domaingenius Well-Known Member

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    Interesting story. I would be interested to know more about
    he HMCE legislation to which you refer. I guess it applies to
    persons registered for VAT ?.

    What I was also thinking of was the more legitimate
    under or over valuing of domains. Who gives a domain
    "a" price ?.

    DG
     
  5. bb99 United Kingdom

    bb99 Well-Known Member

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    This is a FAQ type guide to the Money Laundering regs:

    http://www.hmce.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD_008086

    It applies to everybody operating in business, not just VAT registered businesses. The key thing is whether you accept cash payments in excess of E15,000 - if you do, you have to register with HMCE. So it's hit people like car dealers and antique dealers etc.

    You're right about the whole issue of valuation - I think the Maffia used to launder money by placing crap pieces of art at auction. They would then get a couple of people to bid it up and "force" someone who owed them money to place the winning bid for what was effectively a useless piece of art. Hey presto, the Maffia get a cheque from the auction house instead of a big wad of cash. The same could be done with domain names I suppose...
     
  6. domaingenius

    domaingenius Well-Known Member

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    Thanks for the link BB99. Interesting.Its been a while since
    I have been active in business and the things have changed
    a lot. Used to be main concern was HMCE chasing for unpaid
    VAT ,now its a whole new ballgame. Got to have a look
    at that domain valuation thing ,may be something there....

    DG
     
  7. devolution

    devolution Active Member

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    Two words that cannot exist in the same sentence! Venerable and Halifax.


     
  8. bb99 United Kingdom

    bb99 Well-Known Member

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    I quite agree, and I was born in Halifax!
     
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