Money Laundering
Money Laundering
Money laundering is the way in which criminals attempt to turn cash and assets obtained from criminal activities into genuine assets through the financial system. It is a world-wide problem and governments have been taking major steps in recent years to combat it.
It became a big deal after the tragic events that took place in the United States on 11 September 2001. In response a number of governments called for a rapid and co-ordinated effort to detect and prevent the misuse of the world financial system by terrorists.
The European Union Finance and Economics Ministers and the G-7 Finance Ministers suggested, for example, that such an initiative be pursued in the framework of measures already taken by the international community to combat such activities.
For the purpose of quantifying money laundering, we do not need to follow the money trails beyond the initial point of laundering, because the transactions from that point onwards have all the legitimacy of ordinary monetary flows.
In statistical terms, we would be double counting if we followed hot money all the way round its circuitous path from the scene of the crime to the final investment, and counted the same money each time it moved.
Money Laundering - The Dangers
In recent years, many large US businesses have been warned by US government officials about the dangers of money laundering. They were told to change the way they do business in Colombia and other Latin American and Caribbean nations because they had received "black peso" dollars, according to Customs and DEA officials.
The companies become involved (maybe inadvertently) with money laundering when international money brokers, working in league with drug traffickers, sell cheap American dollars, proceeds of the drug trade, to Colombian importers of appliances, cigarettes, liquor and other products. They use those dollars to buy legitimate goods in the United States from top US companies and their distributors.
The money brokers often pay for the goods in strange ways, like wire transfers from unrelated third parties, which should set off some kind of alarm among the legitimate companies, according to the US Department of Treasury.
Money laundering is not necessarily a straightforward crime. But a destabilizing crime that can only succeed if the funds generated can be utilised without their true source being known. Moreover, criminal activity continues to expand because the washed funds are then reinvested in the business.
It is a dynamic and robust circular process. It will only be stopped when the legitimate business world implements strong coherent anti-money laundering procedures in a serious way, and when drastic action is taken by relevant authorities against the jurisdictions, people and institutions that make the washing cycle possible.
Of course, Members of the FBI already know this. The primary goal of the FBI's money laundering program is to:
- Identify, disrupt, and dismantle the most significant money laundering mechanisms. This will increase the cost of criminal activity, create barriers to entry, and reduce the flow of criminal assets.
- A second goal of this program is to enhance and support money laundering investigations where the specified unlawful activity is unknown.
- A third goal of the program is to enhance and support these investigations in the white collar, organized crime, drug, and violent crimes programs in the FBI.
Wherever you are, whatever you do, you should always be alert to the affects and the potential problems associated with money laundering.
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