EGOLD EXECUTIVES PLEADED GUILTY

Updated: 11/21/2008 16:38
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The three directors of EGold, in addition to its Gold and Silver Reserve parent company, indicted in April 2007 of being a haven for criminal

The three directors of E-Gold, in addition to its Gold & Silver Reserve parent company, indicted in April 2007 of being a haven for criminal activity like processing investment scams and payments for child pornography on Thursday received their sentences. A federal judge decided on Thursday not to impose a prison sentence on the senior directors of E-Gold. Instead each of them was sentenced to three years of probation and 300 hours of community service with some fees to be paid.

Gold & Silver Reserve CEO Douglas Jackson faced a maximum sentence of 20 years in prison and a $500,000 fine. But he spared a heavier fine because, according to his attorney, he's deeply in debt. Thus he was sentenced to pay only $200 fine with the above mentioned time of supervision. Reid Jackson, Douglas Jackson's brother, and E-Gold director Barry Downey were each sentenced to three years of probation, 300 hours of community and ordered to pay a $2,500 fine and a $100 assessment fee each. A maximum fine E-Gold and Gold & Silver Reserve faced could have been $3.7 million, but because neither company could pay that much, they were fined $300,000 with the condition that $10,000 be paid on Monday, with further monthly payments to start in May 2009.

While supporters of E-Gold suggested that enabling nearly anonymous transfers of money in and out of the banking system was what led the feds to target the company, Jackson in turn initially stated that the Secret Service "deceived" a judge with "bogus testimony." In this regard federal prosecutors expressed their firm belief that the directors knew E-Gold facilitates criminal activity.

Interestingly, when Douglas Jackson acknowledged the company was under investigation in 2004 illegal activity still went on with E-Gold which was ascribed by the defendants to bad legal counsel, which convinced them the site did not have to be licensed as a money transmitting business. The court accepted the argument of Downey that he was unaware of the company's need for a license, even though he is a practicing lawyer.

The defendants argued they made every effort to cooperate with investigators while the prosecutors questioned the use of E-Gold's cooperation providing the evidence of the directors? trying to circumspect government interference.

At present E-Gold remains open for business while Jackson announced on November 14 that it was still working at how to comply with the registration process for new accounts now that it's subject to regulation as a "financial institution." Meantime, new account creation is temporally unavailable.


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