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Anti-Child-Porn Tactic Criticized

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By Brian Krebs
washingtonpost.com Staff Writer
Wednesday, June 11, 2008

The decision yesterday by three Internet service providers to block access to online child pornography is the latest in a series of steps by companies and government officials to curb the distribution of such materials. But a report to be published later this month questions whether such actions are making it more difficult to track users.

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The report, by the Financial Coalition Against Child Pornography, formed by credit card issuers and Internet service providers to cut off funding for these crimes, states that the efforts are pushing child pornographers toward unregulated Web companies that allow anonymity in purchases.

"One of the first things that happened when we began shutting down the credit card avenue is that these guys began to look to other ways to get money quickly," said Ernie Allen, president and chief executive of the National Center for Missing & Exploited Children, based in Alexandria.

Many purchasers of child pornography have turned to alternative payment systems to skirt U.S. laws, cyber-crime experts and law enforcement officials said. Unlike traditional banks, these systems allow users to accept and remit payments without revealing their identities.

For example, a user might submit funds to a currency exchange company, many of which are in foreign countries. That company, which would not require proof of identity, would then facilitate the transfer of funds to an online payment company, akin to PayPal, that allows transactions over the Web. From there, the money would be sent to the pornography site, allowing the user access without risk of being named.

One such payment system singled out in the report is WebMoney, an online currency company based in Belize and widely used in Europe. WebMoney users can fund their accounts through a variety of means, including bank wires, money orders and cash deposits at authorized exchange offices around the globe.

WebMoney did not respond to repeated requests for comment.

Mark Schopper, a lawyer in Reno, Nev., has written about the use of alternative payment systems to facilitate money laundering through gambling sites. He said the use of a similar payment system for buyers of child pornography is granting them more cover.

"The government says that we don't want people to have legitimate means to promote or pay for this kind of material, but the flip side of that is that if Uncle Sam were to let this alone, they could more easily track the consumers of this material through the credit card system," Schopper said. "In the end, all they're doing is pushing both industries further underground."

Government efforts to disrupt alternative currency services have not proven successful, critics say.

In 2005, FBI agents raided the Florida offices of E-Gold, an online payment system whereby users convert currency into precious metals. Some company officials were indicted on charges of conspiracy, money laundering and operating an unlicensed money transfer business. They are accused of allowing the service to be used by criminals running financial scams and selling child pornography.

Cyber-crime experts and some law enforcement officials acknowledge that the scrutiny brought by the government's case against E-Gold prompted child pornography consumers who were using the service to migrate to other payment systems.

"Once E-Gold was dealt with by federal law enforcement, another 50 to 60 online payment services suddenly popped up out of nowhere to fill the void," said Tom Kellermann, chairman of the financial coalition's technology group.


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