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So let me get this straight: 1.) they book a night at a cooperating-host with a stolen credit card 2.) host receives payment minus AirBnB fees 2 days later 3

So let me get this straight: 1.) they book a night at a cooperating-host with a stolen credit card 2.) host receives payment minus AirBnB fees 2 days later 3.) host transfers amount minus his own cut to criminals 4.) chargeback from CC owner. I'd guess that Airbnb either charges the Host for the chargeback or cancels the entire account. How is this „scalable laundering“?

ryanlol 9y ago
You create lots of host accounts, or just buy them and change the attached bank accounts. This at least used to be very easy. For many this can be better than e.g. Stripe because AirBnB supports payouts to far more countries, making it easier to get lots of drop accounts. They even do WU in some countries. I would also expect AirBnB to be slower to act on chargebacks than Stripe & Co. I wouldn't expect this to be super scalable, but on the other hand while a few million a month is nothing for AirBnB it is an OK amount even when split across 100 eastern european guys.
- danso 9y ago
  > For many this can be better than e.g. Stripe because AirBnB supports payouts to far more countries This is a bit OT, but I looked up the Airbnb page to see what they accept: https://www.airbnb.com/help/article/126/what-methods-of-payment-does-airbnb-accept https://www.airbnb.com/help/article/126/what-methods-of-paym... I had thought that the general solution for handling worldwide payments was to use Paypal. How does Airbnb facilitate the handling of all these different kind of payment services? Is it a homegrown solution? Or is it not really a major technical problem for services to implement this on their own?
  - huac 9y ago
    built in house https://medium.com/airbnb-engineering/scaling-airbnbs-payment-platform-43ebfc99b324 https://medium.com/airbnb-engineering/scaling-airbnbs-paymen...
  - toast0 9y ago
    PayPal is a US centric general solution for handling worldwide payments. It kind of works worldwide, but is painful/inconvenient for many in some countries. If those countries are major sources of business, it's probably worth making it easier for the customers to spend money. Payment processing is a pain, but it's not that hard to integrate, maybe a few weeks of dedicated engineering plus ocassional maintenance and an account rep to deal with issues/problematic payments. This is big when you're a small company and getting paid is clearly important, but not a central focus of your product; it's not so big when you've got thousands of employees and brokering payments is a key part of your business.
dalbasal 9y ago
"Money laundering," because of all the regulatory attention attached to it, has become a catch all term for shenanigans. If the scam is to get money out of stolen CCs and into your pocket, this is theft and fraud. The money isn't laundered if you can trace it back to a stolen credit card. Money Laundering is taking money that you have, but can't justify having, and giving it a legitimate source. On Airbnb that might be pretending someone is paying lots of money to stay in your apartment. You pay yourself in dirty money. Now your dirty money looks like legitimate Airbnb income. I'm sure Airbnb have the first kind of fraud. Anyone accepting CCs on the internet has it. Actual laundering...? Seems likely. Real estate has always been a popular route. The article (like almost anything money laundering related) mixes and matches, so it's impossible to tell.
laurencei 9y ago
But it can also be: 1.) get "illegal" money from somewhere/anywhere. Create bank accounts under fake names with the "illegal" cash. 2.) host receives payment minus AirBnB fees 2 days later 3.) host transfers amount minus his own cut to criminals 4.) AirBnB never gets notified of anything - it's just another happy customer. So the problem with this scenario is AirBnB never knows about the problem - so all the "bad" hosts can go on for long times, and you dont need as many accounts; thats where the "scalability" comes in.
- jasode 9y ago
  >Create bank accounts under fake names with the "illegal" cash. In USA, I don't see how this is "scalable" with the stringent "know your customer"[1] laws. Using a fake drivers license + fake Social Security Number to open a new bank account with a false name is not trivial. Many banks also require a thumb print for identification. The customer's face is also captured on security cameras as he walked through the bank to open the account. All of that can be cross-checked with the FBI. It seems the preferred method for criminals using banks to wash money is a "shell company" instead of fake personal accounts. E.g. Open a business account for a car washing company or restaurant. But then the criminal has to be careful and make sure his "pattern of deposits" does not raise suspicions. Any unusual banking activity could trigger an investigation for racketeering and money laundering. [1] https://en.wikipedia.org/wiki/Know_your_customer https://en.wikipedia.org/wiki/Know_your_customer
- philihp 9y ago
  4. Airbnb gets notified by their bank to provide restitution for the chargeback.
philihp 9y ago
First, Airbnb cannot charge the host since payment is already released in #2. It's not even clear the host did anything wrong. The guest issued the chargeback. Second, Airbnb probably eats the cost of the chargeback since this is an online CNP transaction.

ryanlol 9y ago

You create lots of host accounts, or just buy them and change the attached bank accounts. This at least used to be very easy. For many this can be better than e.g. Stripe because AirBnB supports payouts to far more countries, making it easier to get lots of drop accounts. They even do WU in some countries. I would also expect AirBnB to be slower to act on chargebacks than Stripe & Co. I wouldn't expect this to be super scalable, but on the other hand while a few million a month is nothing for AirBnB it is an OK amount even when split across 100 eastern european guys.

danso 9y ago
> For many this can be better than e.g. Stripe because AirBnB supports payouts to far more countries This is a bit OT, but I looked up the Airbnb page to see what they accept: https://www.airbnb.com/help/article/126/what-methods-of-payment-does-airbnb-accept https://www.airbnb.com/help/article/126/what-methods-of-paym... I had thought that the general solution for handling worldwide payments was to use Paypal. How does Airbnb facilitate the handling of all these different kind of payment services? Is it a homegrown solution? Or is it not really a major technical problem for services to implement this on their own?
- huac 9y ago
  built in house https://medium.com/airbnb-engineering/scaling-airbnbs-payment-platform-43ebfc99b324 https://medium.com/airbnb-engineering/scaling-airbnbs-paymen...
- toast0 9y ago
  PayPal is a US centric general solution for handling worldwide payments. It kind of works worldwide, but is painful/inconvenient for many in some countries. If those countries are major sources of business, it's probably worth making it easier for the customers to spend money. Payment processing is a pain, but it's not that hard to integrate, maybe a few weeks of dedicated engineering plus ocassional maintenance and an account rep to deal with issues/problematic payments. This is big when you're a small company and getting paid is clearly important, but not a central focus of your product; it's not so big when you've got thousands of employees and brokering payments is a key part of your business.

dalbasal 9y ago

"Money laundering," because of all the regulatory attention attached to it, has become a catch all term for shenanigans. If the scam is to get money out of stolen CCs and into your pocket, this is theft and fraud. The money isn't laundered if you can trace it back to a stolen credit card. Money Laundering is taking money that you have, but can't justify having, and giving it a legitimate source. On Airbnb that might be pretending someone is paying lots of money to stay in your apartment. You pay yourself in dirty money. Now your dirty money looks like legitimate Airbnb income. I'm sure Airbnb have the first kind of fraud. Anyone accepting CCs on the internet has it. Actual laundering...? Seems likely. Real estate has always been a popular route. The article (like almost anything money laundering related) mixes and matches, so it's impossible to tell.

laurencei 9y ago

But it can also be: 1.) get "illegal" money from somewhere/anywhere. Create bank accounts under fake names with the "illegal" cash. 2.) host receives payment minus AirBnB fees 2 days later 3.) host transfers amount minus his own cut to criminals 4.) AirBnB never gets notified of anything - it's just another happy customer. So the problem with this scenario is AirBnB never knows about the problem - so all the "bad" hosts can go on for long times, and you dont need as many accounts; thats where the "scalability" comes in.

jasode 9y ago
>Create bank accounts under fake names with the "illegal" cash. In USA, I don't see how this is "scalable" with the stringent "know your customer"[1] laws. Using a fake drivers license + fake Social Security Number to open a new bank account with a false name is not trivial. Many banks also require a thumb print for identification. The customer's face is also captured on security cameras as he walked through the bank to open the account. All of that can be cross-checked with the FBI. It seems the preferred method for criminals using banks to wash money is a "shell company" instead of fake personal accounts. E.g. Open a business account for a car washing company or restaurant. But then the criminal has to be careful and make sure his "pattern of deposits" does not raise suspicions. Any unusual banking activity could trigger an investigation for racketeering and money laundering. [1] https://en.wikipedia.org/wiki/Know_your_customer https://en.wikipedia.org/wiki/Know_your_customer
philihp 9y ago
4. Airbnb gets notified by their bank to provide restitution for the chargeback.

philihp 9y ago

First, Airbnb cannot charge the host since payment is already released in #2. It's not even clear the host did anything wrong. The guest issued the chargeback. Second, Airbnb probably eats the cost of the chargeback since this is an online CNP transaction.