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Continued from Part 1, here are selected quotes from the transcript testimony of Dr. Jackson, Chairman of e-Gold before the House Energy and Commerce Subcommittee on Oversight and Investigations. This testimony took place on Thursday, September 21, 2006.
During this time period, e-gold received adverse press that came close to implying complicity in this problem, but it was press that was not justified. Based upon the financial size of the CP trade identified by the NCMEC and our review of historical transactions, e-gold has been the payment mechanism abused in less than one hundredth of one percent of the CP payment dollar volume since this problem surfaced. The NCMEC CyberTipLinesends alerts to Financial Coalition members, and alerts are received from other third-party sources as well. Since collaborative efforts started, the activity has decreased dramatically.
When an alert is investigated, 95% of the time the account has already been identified and blocked through e-gold’s own internal investigative efforts, almost always detected upon the first payment or before a single payment has been received. The following chart represents all CP alerts from all sources since December 2005.
e-gold investigators estimate that 90-95% of the alerts received are for CP websites for which e-gold has already blocked the applicable account.
The very favorable trend shown in the chart is not an accident. e-gold continues to refine its protocols to detect and interdict CP payments. Investigative protocols are routinely upgraded as more is learned about the behavior of the perpetrators and enormous personnel resources are applied. e-gold’s cost for investigative and preventive actions to stop the use of e-gold for illicit activity, especially CP, is the single largest element of expense in its business. e-gold will continue to apply this attention and resource until the problem no longer exists.
The following graph illustrates the declining dollar volume that, unfortunately, has escaped detection before the accounts were ultimately identified and blocked. It is evident that the visibility we gained from our association with NCMEC in the fall of 2005 was a turning point in our efforts to prevent e-gold being used at all for CP payment. The declining value depicts the evolving capability of our investigative techniques and show we have reduced e-gold abuse to a marginal level.
To the degree that e-gold has acted against child pornography, good for e-gold. Unfortunately for e-gold, even if the child exploitation element of the indictment were removed, all the charges would still stand with respect to wire fraud and access device fraud. E-gold is going to need more than a public relations campaign with regard to the child exploitation charges if they are to mount a successful defense.
1842 days ago
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