E-Gold Executives Plead Guilty to Money Laundering, Conspiracy

Bob Preston
WASHINGTON — Representatives from Internet payment service E-Gold have pled guilty to money laundering charges, according to the Justice Department.

Based in the West Indies, E-Gold was joined in its guilty plea by an affiliated company, Gold & Silver Reserve. E-Gold chief and Gold & Silver CEO Douglas Jackson pleaded guilty to the charges. Jackson, 51, is from of Melbourne, Fla.

Other parties involved in the case include Barry Downey and Reid Jackson, two senior directors of E-Gold. Downey and Reid Jackson pled guilty to separate charges that related to felony violations of District of Columbia law relating to operating a money transmitting business without a license.

In previous statements, the Justice Department also said that E-Gold had helped move money associated with child pornography, though those charges weren't mentioned in any of the current guilty pleas.

Douglas Jackson announced on his personal blog that E-Gold will not be accepting new accounts for an indefinite period.

A design flaw in the service "made it vexingly difficult for e-gold to expel a user, in a truly effective way, for criminal abuse of the system," he wrote.

All told, the two companies could face a fine of $3.7 million. Douglas Jackson is looking at a maximum prison sentence of 20 years and a fine of $500,000 on money-laundering charges, and a sentence of five years and a fine of $250,000 on money-transmitting charges.

Sentencing is set for Nov. 20.