The story is not written by a mainstream journalist, and is a hoax. There
are subtle errors, omissions, and clues that another reporter can pick up.
Then there are the more obvious ones. FinCEN's director is not named J. Lee
Thomas, for instance:
http://www.treas.gov/fincen/infinc.html#dir
The name "Guzman" is also, suspiciously, the name of the Love Bug suspect:
http://www.washingtonpost.com/wp-dyn/articles/A62575-2000May13.html
Still, it's nicely thought-provoking, and I thank the author for sending us
a rather interesting spoof.
-Declan
At 14:52 5/26/2000 -0500, No User wrote:
>Feds bust online trading scheme
>
>
>May 24, 2000 Washington, D.C. -- When a team of federal agents stormed
>the suburban Virginia home of Miguel and Abi Guzman early one Monday
>morning, the neighbors suspected the worst. Recently arrived from Miami,
>the couple was seldom seen outside of the house and appeared to keep
>irregular hours. But in a matter of days, it would be their neighbors on
>the Internet who would rally to the Guzmans' defense.
>
>According to the U.S. Treasury Department, which led the raid, the
>Guzmans benefited from a vast online network of business contacts and
>conducted millions of dollars in transactions without paying taxes or
>adhering to U.S. trade laws. Sources close to the investigation put the
>total number of persons involved in the "electronic black market" scheme
>in the thousands, with participants in all 50 U.S. states.
>
>"These two individuals have defrauded the American people," declared J.
>Lee Thomas, director of Treasury's Financial Crimes Enforcement Network
>(FinCEN), "and they have broken the trust that is so essential to our
>national economy." FinCEN's agents, ordinarily assigned to
>money-laundering operations, began tracking the Guzmans' operations in
>the fall of 1997, on a tip from the Internal Revenue Service. The IRS
>began investigating the Guzmans in 1995 for alleged tax evasion in a
>complex online bartering scheme. Because no actual money was involved
>and the shadowy transactions were so complex, the IRS eventually handed
>the case to FinCEN.
>
>Denied bail at their May 10 arraignment in District Court in Washington,
>D.C., the Guzmans are awaiting trial for what could be the first major
>setback to the unruly, frontier culture of commerce on the Internet.
>Through their lawyers, the Guzmans contend that they are, in fact, the
>nation's first "political prisoners" in a growing federal war against
>the Internet community. Their hope is to convince both the general
>public and their captors that they are guilty only of trading gifts with
>their "online neighbors."
>
>"The Guzmans are upstanding citizens who are being punished for building
>friendships over the Internet," argued Naomi Bustamante, the attorney
>representing Abi Guzman. "If the Guzmans are not free to exchange gifts
>with their online friends, we are living in a Nazi nightmare."
>
>But what the Guzmans call "gifts," the government calls unreported
>financial transactions. At the heart of the contentious and far-reaching
>dispute is a software system developed by Miguel Guzman that enables
>people to swap goods and services over the Internet. Guzman, who
>formerly worked as a system administrator for the University of Miami,
>first developed his program to simplify the process of scheduling the
>hundreds of classes taught on campus each semester. It was in 1995 that
>the clever programmer "ported" his analysis and scheduling tool to the
>Web.
>
>Dubbed CuppaSugar, Guzman's program allows for dozens of parties to
>participate in serial trades in which goods may change hands several
>times before any given transaction is completed. For example if a man in
>Long Beach wants 10 packages of buffalo jerky sold only in South Dakota,
>he can place his request through CuppaSugar and will eventually receive
>the jerky along with a request for another good or service of equal
>value, such as picking up a video rental and delivering it to someone in
>his town. By 1999, CuppaSugar was arranging over 50 such transactions
>per minute, with "gifts" exchanged ranging from new cars and dentistry
>to homemade cookies and dry cleaning. Participants who failed to
>reciprocate properly were blocked from using the system.
>
>While CuppaSugar's countless users laud the service as utopian, federal
>authorities consider it no different from the illegal economies operated
>by organized crime syndicates. "If enough people were drawn into the
>Guzmans' network, public schools and federal highways would disappear,"
>warned Donald Hanover, the federal prosecutor handling the case against
>the Guzmans, "because there simply wouldn't be any tax money to fund
>them." He further insinuated that this economy of IOUs is rife with the
>possibility of extortion and is operated outside of the protection of
>police.
>
>Internet industry analysts, however, are queasy about the government
>crackdown on Internet trade and consider the CuppaSugar network, like
>Napster, to be a prototype for the global, Internet-based economic
>structures of the future. "Just because 'money' isn't involved doesn't
>mean it can't be monetized in some other way," explains Lorne Weller, a
>partner with Internet Capital Group. "Nothing can stop the Internet from
>replacing society, and if that includes the economy, then so be it."
