Police swoop on online fraudsters laundering money through iTunes

The Metropolitan Police's specialist e-crime department this week released details of a very unusual piece of online fraud: laundering money from stolen credit cards through royalties paid by online music services.

Stealing credit cards is nothing new.  Nor is using them to buy things afterwards.  But both crimes are very easy to trace, and the authorities can usually very easily track down the source of a stolen, or faked, credit card.

Ten 'DJs' based in London and the West Midlands, however, found a way to cover their tracks.  Rather than using stolen cards to buy things for themselves, they used them to buy products which earned them royalties.  They sent their tracks to a US service, which made them available on iTunes and Amazon, the two biggest online music stores.

Then, for the next few months, they stole credit cards and used them to buy their own tracks.  The money in question passed through the US and went through the accounts of two different organisations, the company managing the upload to iTunes and Amazon, and the download service itself--neither of whom suspected anything--before coming back to the fraudsters as what looked like perfectly legal royalty payments.

In total, spending 750 000 dollars netted the gang around 300 000 dollars worth of royalty payments, in part thanks to real customers buying their tracks after they climbed up the charts thanks to the gang's own massive spending.

It was only when the banks and credit card companies started to notice the amount of money being spent on iTunes that the joint Anglo-American investigation, which has lasted five months, began.

The ten arrests come almost a year to the day of the formation of Scotland Yard's e-crime unit, with a spokesman commenting, ''This investigation, with its national and international dimension, exemplifies why we have set up this national response to e-crime.''

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