Cell phones for money laundering?

There’s been some recent discussion about the risks of being able to store money on cell phones and so to move it about in a way that’s hard to see using conventional tools. Of course, this isn’t really a new thing — putting money on a credit card before a trip and then using it in a different place is a well-known way of moving money across international borders (and, for a while, getting a decent exchange rate while doing it). You can find some of the discussion, in a counterterrorism setting, here.

This concern seems overblown to me. There are significant disadvantages to a terrorist in carrying and using an electronic device that is able to reveal where he is and, worse still, do so without making it obvious. There are a number of issues that require different amounts of skill to exploit:

  1. Cell phones that are turned on tell the nearest tower(s) roughly where they are. The tower can tell the direction in which the phone lies, and can estimate its distance. If multiple towers can see it, they can triangulate to get an even better position estimate. This ability is built in as part of the Extended 911 service that lets emergency services find someone in difficulty easily.
  2. Increasingly cell phones know where they are because they have inbuilt GPS sensing. They can be interrogated for this information under certain circumstances (a beloved plot device in TV dramas). This data can be integrated with other s/w on a phone, providing other channels for it to be disseminated.
  3. Cell phones are not robust from a security point of view and it is relatively straightforward to install hacks on them. For example, you can find instructions for turning every call into a silent conference call with another phone.
  4. SIM cards can be cloned so that another phone in the same cell receives the same packets (although this seems likely to confuse the cell tower).
  5. Even without access to the telco system and the encrypted communication, the device is radiating and so all of the standard location technologies will work. (Picking the device of interest may be difficult in urban settings.)

All of which suggest that cell phones are not going to be the terrorists’ friend any time soon. If they don’t want to carry such devices, they are unlikely to want to use them as electronic wallets.

It may help to keep a cell phone turned off, but this assumes that there’s no backdoor that enables the phone to communicate even when powered down. And it has to be on to be used as a wallet.

Of course, there are anonymous cell phones around, but even this does not solve the problem. There are already data-mining services that attempt to predict when multiple phones are owned by the same person based on the pattern of cell towers that they use with what frequency.


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