Child-porn industry using web-based system to move funds - East Valley Tribune: Public Safety

Child-porn industry using web-based system to move funds

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Posted: Tuesday, June 15, 2010 7:12 am

WASHINGTON - Authorities are banding together ever more closely with the financial sector and Internet providers in hopes of disrupting the multibillion-dollar global child-pornography trade.

These concerted efforts come as the child-porn industry has shifted in the last five years to a more anonymous, web-based system for moving funds, according to law-enforcement officials, technology specialists and money-laundering experts.

To root out the companies that supply an estimated $20 billion annual global child-porn market, the Financial Coalition Against Child Pornography -- comprised of Internet service providers, financial heavyweights and technology companies -- is working closely with law-enforcement agencies in the United States and around the world.

The financial coalition is having an effect on the child-porn business, according to executive director Cathy Cummings. Since the coalition started in 2006:

-- The monthly price of a child-porn subscription has jumped from $20 to hundreds or thousands of dollars.

-- The number of unique websites containing commercial child porn has declined by 50 percent (a unique website may move to a different URL).

-- Child-porn producers have added extra steps to the purchasing process, making it more anonymous and cumbersome.

"We're seeing very positive trends in the United States that indicate we are having an impact," Cummings said.

The financial coalition was spearheaded by the Alexandria, Va.-based National Center for Missing and Exploited Children. The organization operates a clearinghouse called the CyberTipline, which has received 750,000 reports of child porn since it started in 1998.

The national center works with a laundry list of law-enforcement agencies, including the FBI, the U.S. Department of Homeland Security's Immigration and Customs Enforcement bureau, the U.S. Postal Inspection Service, the U.S. Secret Service and the U.S. Department of Justice's Child Exploitation and Obscenity Section.

The national center has helped remove from the Web almost 8,000 images in the United States displaying young children being sexually abused, according to John Shehan, executive director of the exploited-children division.

These aren't images of teenagers, or young-looking adults. "It's really worst of the worst," Shehan said. "These are infants and prepubescent children that are in terrible situations. They are being sexually abused and raped and photographed."

Some law-enforcement officials contend that disrupting the companies making a profit off child pornography may only be the tip of the iceberg. Matt Dunn, of the Cyber Crimes Center at the Immigration and Customs Enforcement bureau, said that non-commercial child pornography -- images shared without money changing hands -- is more of a concern than the for-profit industry.

Swapping child porn over file-sharing networks is ongoing -- and it's usually non-commercial, Dunn said. "It's happening every second of every day," he said.

Dunn also questions the estimate that commercial child porn is a $20 billion a year industry -- a figure cited in a 2006 congressional hearing -- and instead thinks it's substantially lower, perhaps in the tens of millions of dollars.

But Dunn acknowledges it is difficult to know the extent of the commercial child-porn industry because, as law enforcement accelerates efforts to make undercover child-porn purchases, the producers have become more elusive and burrow further underground.

Tom Kellermann, who has chaired the financial coalition's technology group, says there are two backbones of the Internet that child-porn producers are exploiting: hosting services and electronic payment systems.

"We are staring at a brick wall," said Kellermann, who works at Core Security Technologies, a Boston-headquartered computer firm. "The problem now is the two verticals within the e-commerce economy -- hosting and e-payment -- have yet to be regulated. They have become, essentially, part of the shadow economy that fuels cyber crime."

Hosting services provide the computer storage space for files to be accessed across the Internet. These servers can become compromised or infected, or their owners may simply take a hands-off approach to knowing what types of files are saved there. To begin to address the issue, the largest hosting company in the world, GoDaddy.com, recently joined the financial coalition.

The other central issue is e-currencies, known as "alternative payment channels." Dozens of companies offer Internet-based banking systems that allow money to be moved around the world instantly, with an extremely high degree of anonymity. These e-currencies are frequently based in countries with a minimal degree of financial oversight, allowing the companies behind them to elude longstanding banking practices to ferret out money laundering and illegal activity financing, experts say.

Cummings said the financial coalition's largest challenge is understanding and staying ahead of how child-pornography businesses evolve.

"As we talk about these layering techniques and payment processes, clearly they're not going to just pack up their tent and walk away quickly," she said. "They have found a way to make a lot of money, so what we need to do is evolve along with them. As alternative payment schemes are developed and are used in this business, it's our job to stay on top of those developments and anticipate them whenever we can."

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