LAS VEGAS — Prepaid cards are becoming a popular tool for criminals that need to manage large sums of money, according to law enforcement officials.

"Currency is a problem because it takes up space and weighs a lot," Susan Smith, a senior trial attorney with the Department of Justice, said in a speech Tuesday at the Electronic Transactions Association annual meeting and expo here. Drug peddlers and other criminals want to eliminate the burden of moving tens of thousands of dollars in paper currency, and "are looking for products that can imitate cash but don't have the problems of cash."

Prepaid and stored-value cards offer an easy solution, said Smith, who handles anti-money-laundering cases.

Criminals often buy hundreds of open-loop prepaid cards and resell them anonymously online at a discount, making it easy for them to launder their money, she said. Even if they lose $100 for every $500 in prepaid cards sold online, that loss is just "a cost of doing business."

Some criminals will move the proceeds from these online card sales into accounts with PayPal Inc. or a bank and then withdraw the funds, Smith said. "Nobody questions that because they made a legitimate sale on eBay or Craigslist." PayPal is a unit of eBay Inc.

Payment organizations, such as acquirers and processors, should be aware of how criminals use prepaid cards because these companies are often the first to notice suspicious transaction activity, she said.

Law enforcement agencies also are monitoring the evolving mobile payments technologies, which could lead to new challenges, Smith said. Many companies are developing payments systems that would work with phones.

Criminals already communicate sometimes with prepaid phones, which are hard to track; monitoring transactions made with anonymous phones could also prove difficult, she said.

"We have to get court orders to monitor phone conversations," Smith said. "Do we have to get a court order to monitor financial transactions made with that phone?"