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Douglas Jackson, the founder and director of the online payment service e-Gold and its parent company Gold & Silver Reserve, has ended a two-and-a-half-year battle with the Justice Department and pleaded guilty to charges pertaining to money laundering and operating an unlicensed money transmitting business. He faces up to 20 years in prison on the money-laundering charge and up to 5 years in prison on the licensing charge.

Jackson (at right) was indicted in April 2007, following a December 2005 Secret Service raid on his company's offices in Melbourne, Florida.

He and two other senior e-Gold directors, who also pleaded guilty to operating an unlicensed money transmitting business, have also agreed to introduce user restrictions on e-Gold and to revamp the system to make it easier to detect money-laundering activities, fixing some design flaws that Jackson acknowledges allowed criminals to use the system for illegal purposes. The company has currently suspended the opening of new accounts.