Mt Gox needs to use a third party for AML/KYC rather than do it themselves. There is too much incentive for them to simply claim documents are fake and block account holders because there is no transparency at all .
Its like putting the banks in charge of their own regulations through the SEC which caused the GFC !
From my personal experience with them, I think they send the funds to a "court". They do not get to keep the funds (assuming you file counter charges against Mt. Gox).
Im more worried about my personal ID being on a site thats a honeypot for hackers....considering mt gox has been hacked in the past its not a risk I want to take. Did someone mention identity theft ?