Second Life sex is a thriving industry. This is perhaps the only game that lists a steampunk-themed homoerotic sex club and an island devoted to having sex with anthropomorphic cows on its official website as "places of interest." This is possible thanks to the users who spend hours programming the animation for avatars having every conceivable type of sex, since that s**t certainly doesn't come with the game. One such user is former plumber Kevin Alderman, who saw a need for a service and filled it with pixelated penises.

Via Alphavilleherald.com
Plus one very sad digital wig.

Alderman, using the pseudonym Stroker Serpentine (which sounds like Harry Potter's former teacher who can't go near a school anymore), created hundreds of animations of Second Life avatars performing lewd acts. Thousands of users each paid Alderman the equivalent of $46 in real-world money so they could pretend to have sex within the game, because sometimes chatting one-handed just doesn't cut it anymore.

So successful were these animations that when a teenager in Texas copied them and tried to sell them on his own, Alderman found the kid, brought him to court, and eventually obtained a settlement against him. But Alderman's biggest accomplishment was much more ambitious: He was also the creator of the sex capital of the virtual world, Second Life's Amsterdam. Using high-resolution photos of the real place, Alderman painstakingly recreated the city of Amsterdam, right down to the canals, the train stations, and the hookers.

Via Informationweek.com
Remember to use a proxy or you'll catch some malware.

The virtual city is populated by hundreds of shops (most of which specialize in sex toys for Second Life avatars), erotic nightclubs, and, yes, prostitutes soliciting visitors for cybersex. Was it worth all that effort? Well, in 2007, Alderman sold "Amsterdam" to a Dutch investment company for $50,000, because no matter if it's the real or the fake world, boners are always a good investment. So we're gonna go with "Unfortunately, yes."

In 2011, South Korea accused its wacky northern neighbor of essentially using cheat codes to get rich. According to authorities, around 30 computer experts trained at elite North Korean science academies were released from government service and jobs at state-owned companies and put in contact with several Chinese and South Korean hackers. Working together, the uber-nerds were able to manipulate the servers of the most popular online games in South Korea, Lineage II and Dungeon Fighter, to get free, unlimited access.

Via Geek-woman.com
We're 100 percent positive that this is the way Kim Jong Il pictured himself.

So what was the plan? Getting lots of fake video game money. Once they were in, the government-sanctioned hackers programmed dozens of computers to autoplay the games around the clock, doing nothing but collecting gold. If you haven't played a game since the '80s, that's like if the USSR had gotten KGB agents to play Pac-Man all day to steal the top sco- actually, never mind, that probably happened for real.

The hackers then converted the fake currency into real-world money by selling it to lazy chumps through auction websites -- they managed to accumulate around $6 million this way, a significant part of which went back to the North Korean government's "slush fund." According to The New York Times, that fund was used to "help finance [Kim Jong Il's] nuclear weapons programs and to smuggle Rolex watches and other luxury goods, which he doles out to buy the allegiance of the party and the military elite."

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So that's what all that sign burning was about -- pissed-off MMO players protesting cheating.

Of course, such a complex operation couldn't be carried out from someone's basement: The hackers had to travel to China for five months to set everything up and risked getting caught if anyone found out what they were doing. In fact, five South Koreans were arrested in 2011 for helping them. The North Korean government has denied any responsibility for these scams, telling South Korean authorities to "Shove the cheap gimmicks."

Via Onlineathens.com
"No, we haven't been spending time in online games. Do I look like an online gamer to you? Why are you laughing?"

Advancements like voice and text chatting within video games have allowed players to exchange maternal insults with people from all over the world. It's not all positive, though: If you're not careful about who you talk to, you may run into a criminal ordering a real-life murder. Seriously.

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And if you don't stop slurping Mountain Dew so close to the mic, that murder may be yours.

According to journalist Misha Glenny, who has written for the BBC and The Guardian, Russian mobsters and South American drug cartels are using online games to carry out illegal activities such as money laundering right under our noses. As we alluded to above, every MMO has some form of internal currency: In World of Warcraft, it's gold; in Second Life, it's the Linden; and in Knights of the Old Republic, it's buyer's remorse. Countless transactions are carried out within these games every day and it would be impossible to monitor them all, a fact that gangs use to their advantage.

How? By using online games to launder and transfer funds around the world. Glenny's investigation uncovered the fact that Russian mobsters and Colombian drug lords are using dirty money to buy, for example, World of Warcraft gold and then transferring that gold to a player in another country. Then all the recipient has to do is convert the gold back into U.S. dollars and the transaction is complete. Some crooks hire entire tech teams and use hundreds of accounts, all dedicated to successfully moving cash through online games.

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"Sir, you'll have the cash as soon as the PS3 finishes updating."

But it gets worse: According to leaked documents from U.S. agencies, international gangs are also using the voice chatting features in consoles like the PlayStation 3 and Xbox 360 to talk with each other and even order murders overseas. The documents specifically mention that "MS-13 members may have used this communications tactic to order at least one murder ... as well as the murder of a possible witness." It's unclear whether the hits were carried out with katanas and jet packs.

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Or by an X-Files team of supervillains.

This whole thing may sound alarmist as s**t, but when you think about it, it makes sense: These days, phone calls, emails, and text messages can be easily monitored, but no one's paying attention to the verbal exchanges that are going on within video games (mostly because they can barely be considered verbal). Honestly, why wouldn't gangsters use online games to communicate? Other than the fact that they might run into people who are even more devious than themselves, which brings us to ...

Some scammers con people out of $32,000 and get two years in prison. "Eddie Lampert" and "Mordor Exuel" stole over $50,000 from their investors and got nothing ... well, except $50,000. The only reason they got away with it was because they did it within the game EVE Online -- in other words, they found a loophole that allowed them to rip people off in a completely legal, totally shameless, and extremely nerdy way.

For a game that is ostensibly about flying spaceships around an untamed virtual universe, an inexplicable amount of EVE Online's playtime has you living the exciting life of a space accountant. Unlike other MMOs, your power is determined not just by how many hours you've spent killing things, but also by how much money you've saved up. Players have different ways of accumulating funds: some mine, some invest in the game's economy ... and some pull off massive, thousand-dollar Ponzi schemes.

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"No, just hear me out -- it's totally legit. First, we get a spaceship ..."

In 2011, Lampert and Exuel hatched a plan that would have gained them the admiration of both Bernie Madoff and Emperor Palpatine. They chartered a company in the game called Phaser Inc. and started to attract investors with a simple promise: 5 percent returns on any investment in only a week's time. If that sounds too good to be true, that's because it was: Like all Ponzi schemes, they just used their clients' money to pay other clients, building positive word of mouth despite being completely full of crap.

Before too long, they were a major force in the EVE economy and were handling hundreds of transactions a day. And then, after eight months of that, they said, "OK, that's enough," and posted this image to their website:

Via Joystiq.com
At this point, two giant hands came from each side and formed a cosmic Goatse.

Phaser Inc. told its 4,000 investors that their money was gone: "You've invested it, got a chance on some profit, but it turned out not to be the best choice you've ever made." Lampert and Exuel had pocketed a trillion ISK (the game's currency), or approximately $52,000. And, worst of all, there was nothing anyone could do about it, because shady dealings like these aren't forbidden by the game's rules. Not even on this scale.

While the scammers said that they planned to use the money to "play EVE for a very, very, very long time," all they'd have to do is get in touch with some of the schmucks who pay gold farmers and they could transform those virtual bucks into actual money. In fact, the only reason they haven't done it is probably because someone could find out who they are and then they'd have 4,000 people lining up to kick them in the dick.

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"They passed out again. Someone make a run for more smelling salts."

South Korea's Cyber Terror Response Center has been active since 2000 and works on a yearly budget of 10 billion won (almost $10 million). By 2011, they had a network of a thousand agents working all over the country. Pretty impressive, although their recruitment-video-making skills seem stuck in the early '90s:

Their re-enactment of a young player being scammed inside an MMO at 2:40 in that video may not be very convincing, but in South Korea this is a serious problem -- of the 40,000 complaints the CTRC received over six months in 2003, 22,000 were related to online gaming. Sometimes virtual crimes spill over into the real world, with people stabbing each other over game items. As the past decade advanced, they also had to start dealing with bigger threats, like the persistent digital attacks from those dicks in North Korea and scams by international gold farmers.

To deal with that, the South Korean authorities once again have had to step up their game: Last year, Seoul enlisted the first 30 students to be trained at the new school for cyberwarfare. Through the school, those in the South Korean army "seek to nurture warriors to fight in cyberwarfare amid growing cyberterror threats from North Korea and to secure a stable supply of specialists."

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"Don't f**k with me. I'll eat you whole and s**t out your head."

What's more, the U.S. has started following South Korea's example. In 2008, U.S. intelligence unveiled project Reynard, an initiative specifically dedicated to figuring out how to spy on MMO players. The idea is to prevent terrorists from abusing this technology by recruiting members and sending orders through World of Warcraft characters and the like. The system would work by "detecting suspicious behavior" (through data mining) in games where 90 percent of all interactions consist of murdering things. Good luck with that.

We know mobsters and drug dealers do it, but are terrorists really contacting each other this way? As far as we can tell, there isn't a single instance of this happening, but maybe that's just evidence that the program is already in action and working like a charm. That, or no one had actually thought to do this until U.S. intelligence announced the idea to the world. Whoops.

Matt Culkin is graduating in May and could really use a writing job; email him at Mrculkin@gmail.com or follow him @MRCulkin. Jack, on the other hand, might never graduate. Email him at coastyjack@gmail.com.

For more instances of games and real life merging, check out 5 Real Skills Video Games Have Secretly Been Teaching Us and 6 Acts of Real-Life Heroism Made Possible by Video Games.

If you're pressed for time and just looking for a quick fix, then check out 5 Bizarre Workers' Comp Claims That Were Actually Successful.

And stop by LinkSTORM to discover which flower to eat that'll let you throw fireballs.

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