...prior to the call from the Royal Canadian Mounted Police (RCMP) are as follows:- Regardless of the further background checks undertaken by myself, the Bank should already have had cause for concern with this client. A major worry being the multi-jurisdictional aspect of the LLC business; registered in St.Luke but not incorporated there, the Head Office in Canada, business based in Belgium, clientele Canadian and U.S. based and using offshore jurisdictions around the world. There is no clear commercial rationale behind the reason for this which must be a major consideration when assessing client due diligence (CDD) as multi-jurisdictional structures are vulnerable for money laundering and terrorist financing. Concern is heightened further given that “95 per cent of its dealings involved legitimate money management in offshore jurisdictions around the world” and yet the company is registered for securities business in Canada. There is no precise understanding as to why this is and any account administrator picking up the file for the first time (or anytime) wouldn’t have a clear picture as to the exact nature of this business. The Financial Action Task Force (FATF) issued a paper (1) on the misuse of corporate vehicles which illustrated four typologies; typology one highlighted the problems behind multi-jurisdictional structures. The report supports the findings of the OECD (2) who have stated that “the types of vehicles most frequently misused are those that provide the...
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...MONEY LAUNDERING Presented by TUAGIRA MIKE Email: tuagira09@live.com Phone: +250788588648 From RWANDA KIGALI Table of Contents Introduction1 Background 2 Money laundering methods 3 The elements of Money laundering 4 Patterns and Trends of Money Laundering 5 Characteristics ………………………... …………………………………………………………6 Cultural influence6 Foreground factors……………………………………………… ……………………………….6 Legal issues……………………………….………………………………………………………7 Investigation issues……………………………..………………………………………………...8 Methods of obtaining evidence ………………………..………………………………………...8 Investigation techniques …............................................................................................................9 Challenges…………………………………………………………………………………………9 Policing Strategies……………………………………………………………………………......10 Conclusion…………………………………………….…………………………………………..10 References…………………………………………………………….…………………………..11 I. Introduction There are various definitions available which describe the phrase ‘Money Laundering’. Article 1 of the draft European Communities (EC) Directive of March 1990 defines it as the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source. In Rwanda context, the crime Money Laundering is defined under article 2, paragraph 1 of law no 47/2008 of 09 September 2008 on prevention and penalizing the crime of money laundering...
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...Assignment #2 Introduction Money laundering is a complex scheme that can be very hard for fraud investigators to investigate and catch. Essentially what money launderers do is take illegal money and through a three-step process, make it look like money from legal sources. The three steps are placement (getting the money into the financial system), layering (concealment of the true source of the money), and integration (conversion of money into perpetrators possession). It is common for drug traffickers and terrorist groups to use money laundering to get the cash required to carry out their operations. It is a way for them to get illegal money to look like money from legal sources. It is very difficult for investigators to fully track the money through the process, especially now with the use of technology and the Internet (wire transfers), but there is certain types of evidence that can be looked for to see if money laundering is occurring. All of this will be discussed in more depth. Terrorist Organizations and Money Laundering Terrorist organizations use the three-step process described above to get money from all illegal sources, which can then be used to fund their organization. The money that terrorists get usually goes towards weapons, which can also be illegal to obtain. So if they get money through money laundering and then find weapons through another system, it can all be done under the table and no one is aware that the transactions are occurring. If...
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...(i) Discuss – What is money laundering? How does it differ from terrorist financing? The term money laundering was first pioneered in the early 20th Century. The disguising of income derived from illegitimate activities date back as far as the 13th Century B.C. The infamous Alphonse “Al” Capone who was an infamous organised criminal figure in America during the 1920s during the US Prohibition Era, was grossing criminal proceeds estimated to $100,000,000 of which he laundered through a series of businesses. Lansky who was known as the 'Mob's Accountant' unitised the worth of foreign countries that provide havens for criminal activities. Through laundering Lansky held untraceable millions in Swiss bank accounts and in banks and corporations abroad....
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...Fraud and Money Laundering Definition Money laundering is defined as: ‘The funnelling of cash or other funds generated from illegal activities through legitimate financial institutions and businesses to conceal the source of the funds.’ Anti-Money Laundering, 2nd ed., IFAC, 2004 Fraud is a general term for deliberate misrepresentation and may include money laundering. The problems of fraud and especially money laundering are increasing at an unprecedented rate. Governments worldwide are introducing new legislation and penalties for such white collar crimes. However, the huge amounts of money involved in these illegal activities ensure that criminals continue to exploit ways of increasing their activities. They clearly weigh up the potentially vast profits against their chances of being caught and the subsequent penalties. Context It is a fact that legitimate financial institutions and businesses may be involved in fraud and money laundering. It is therefore crucial that CIMA members, whether in practice or in business, are fully aware of this possibility and are alert to the signs of money laundering which can affect their business. Examination candidates should be aware of the risks involved, especially at strategic and TOPCIMA level. They should ensure that they know the signs of possible money laundering and the steps they must take to report it. 3 Topic Gateway Series Fraud and Money Laundering Overview There are a number of ways in which criminals commit...
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...Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source.[1] It is a crime in many jurisdictions with varying definitions. It is a key operation of the underground economy. In US law it is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. In UK law the common law definition is wider. The act is defined as taking any action with property of any form which is either wholly or in part the proceeds of a crime that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial ownership of said property. In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government and international regulators such as the US Office of the Comptroller of the Currency to mean any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting. In the UK, it does not even need to involve money, but any economic good. Courts involve money laundering committed by private individuals, drug dealers, businesses, corrupt officials, members of criminal organizations such as the Mafia, and even states. As financial crime has become more complex, and "Financial Intelligence" (FININT) has become more recognized...
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...Money laundering in football - lessons for the sports industry on Wednesday, 21 December 2011. Hits 2915 Written By Kevin Carpenter[->0] Money laundering in football is not a new phenomenon but the poor financial health of world football overall has lead to increased scrutiny in recent years by leading organisations such as Transparency International ('TI') (the world’s leading non-governmental anti-corruption organisation) and the Financial Action Task Force (‘FATF’) (an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing). Indeed TI has suggested that, ”Vulnerabilities in the sector's financing and due diligence practices, culture and structure are seen…as creating an environment conducive to money laundering by organised crime.“ The concerns have been compounded by two recent high profile cases in the UK then this makes it a good time to analyse this ever present threat. What is money laundering and why is football a target? Money laundering is the process by which proceeds of crime (so called "dirty money" or “criminal property”) are changed so that the proceeds appear to have come from a legitimate source. The proceeds of crime is money, or other assets, that have been acquired or generated through criminal activities in the UK or abroad. There are three main areas of vulnerability in the football sector which can be identified: The sector’s structure – market...
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...What is Money Laundering? The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source. Illegal arms sales, smuggling, and the activities of organised crime, including for example drug trafficking and prostitution rings, can generate huge amounts of proceeds. Embezzlement, insider trading, bribery and computer fraud schemes can also produce large profits and create the incentive to “legitimise” the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. In response to mounting concern over money laundering, the Financial Action Task Force on money laundering (FATF) was established by the G-7 Summit in Paris in 1989 to develop a co-ordinated international response. One of the first tasks of the FATF was to develop Recommendations, 40 in all, which set out the measures national governments should take to implement effective anti-money laundering programmes. How much...
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...Anti Money Laundering http://www.antimoneylaundering.org/ HOME | ABOUT US | INDUSTRY | SERVICES | NEWS & MEDIA | EVENTS | CONTACT US Related Areas Know Your Customer (KYC) Services Online Political Corruption Data-File Terrorist Financing Filter Anti Corruption Enhanced Due Diligence (EDD) services Regulatory Compliance Country-Check Foreign Corrupt Practises Act Anti Money Laundering The word money laundering refers to the use of the financial system to hide the source of funds gained from illegal activity such as drug trafficking, bribery, extortion, embezzlement, theft or other criminal activity, as the criminals try to make their ill gotten gains appear genuine. Anti Money Laundering is the term used by banks and other financial institutions to describe the variety of measures they have to combat this illegal activity and to prevent criminals from using individual banks and the financial system in general as the conduit for their Proceeds of Crime. In all major jurisdictions around the world, criminal legislation and regulation make it mandatory for banks and financial institutions to have arrangements to combat Money Laundering, with harsh criminal penalties for non-compliance. The vast majority of criminal dealings are done in cash. Criminals need ways to dispose of the cash and have it reappear as part of their wealth with as little chance as possible of it being tracked back to the cash element. Criminals have to use the financial...
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...Money Laundering 1. What is the deviance/crime, legally what level felony? The crime of money laundering is defined as a “financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money” (Featherstone & Deflem, 471). It is a federal felony in the United States, for which the penalty is “…a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both” (Laundering of Monetary Instruments). 2. Who is the victim(s)? In money laundering, there are a number of victims. The most direct victim is the financial institution through which the money passed, which is typically deceived by the money launderer as to the source of the money. The crime victimizes nations in a broader way by distorting national and global financial data. Inaccurate financial data can have many negative macroeconomic consequences, including inexplicable changes in money demand, risks to bank soundness, contamination effects on legal financial transactions, and increased unpredictability of international capital flows and exchange rates due to unanticipated cross-border asset transfers (fatf-gafi.org). 3. Is there a "typical" social background of the offender(s)? Are there any current trends . . . data issues? The typical money launderer is usually wealthy since the person or organization has a large, steady amount of excess money that needs...
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...Advance Financial Reporting Christine Andrews January 11, 2015 1A. What is Money Laundering? Money laundering refers to activities and financial transactions that are accepted to disguise where the particular source or nature of the illicit activities cash flow is coming from. Usually, the money that is laundered is received from an illegal enterprise with the goal being to make it appear as though it is coming from a legitimate source. (“Overview - Money Laundering. (2014)”). 1B. Government Agencies or Other Organizations Involved These criminal actives may include, drug trafficking, smuggling, corruption and human trafficking, which usually generate large sums of profits for those individuals carrying out the act. Many governmental agencies are cracking down to help prevent these acts that have been associated with money laundering. The agencies are as listed: (“Other Government Agencies Combating Money Laundering and Terrorist Financing. (n.d.)”) * Federal Bureau of Investigation * Internal Revenue Service Criminal Investigation * Office of National Drug Control Policy * U.S State Department * Financial Crimes Enforcement Network * Office of Foreign Asset Control * Government Accountability Office 1C. Statistics and Reports of Money Laundering and Criminal Penalties Many investigations have started each year to look into possible acts of money laundering. As like most illegal acts, not all of them are caught however for the ones that...
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...MONEY LAUNDERING RED FLAGS WIRE TRANSFERS This document lists various transactions and activities that may indicate potential money laundering. While not all-inclusive, the list does reflect ways that launderers have been known to operate. Transactions or activities listed here may not necessarily be indicative of money laundering if they are consistent with a customer’s legitimate business. Also, many of the “red flags” involve more than one type of transaction. 1. Wire transfer to bank secrecy haven countries. Transfers to well known “secrecy havens.” 2. Incoming/Outgoing wire transfers with instructions to pay upon proper identification. The instructions to the receiving bank are to “pay upon proper identification.” If paid for in cash, the amount may be just under $10,000 so no Currency Transaction Report is required. The purchase may be made with numerous official checks or other monetary instruments. The amount of the transfer may be large, or the funds may be sent to a foreign country. 3. Outgoing wire transfers requested by non-account holders. If paid in cash, the amount may be just under $10,000 to avoid a Currency Transaction Report. Alternatively, the transfer may be paid with several official checks or other monetary instruments. The funds may be directed to a foreign country. 4. Frequent wire transfers with no apparent business reason. A customer’s frequent wire transfer activity is not justified by the nature of their business. 5. High volume of wire transfers...
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...Practice of Regulation of Anti-Money Laundering for Banks and NonBanks Hayford Kwesi Annor Manager, Risk & Compliance/AMLRO, ABii National Savings & Loans Ltd. Doctorate of finance student, SMC University, Switzerland. FAAFM, Ch.FE, ACCPA, MBA, BSc, HND h.k.annor@gmail.com Abstract A deregulated financial sector is free to accumulate and allocate funds from anywhere irrespective of the nature, form, intent and source. Without regulatory oversight, this poses zero risk to banks and nonbanks no matter how they finance the capital structure. In the real world, banking is an outcome of interactions between the regulator and the regulated. Regulatory consequences apply for failure to comply with the acceptable standards of best practices of banking regulation which include fines, sanctions, jail terms and revocation of the banking license for willful or non-willful noncompliance. The physical disposal of proceeds of funds’ from crime with aim of separating same, through creation of layers to disguise trails of the source and make it seem legitimate undermines the integrity of the financial system. It is required of the banking sector to build a comprehensive framework that identifies, assesses, monitors, mitigates and reports perceptions of suspicious activities of money launderers under the discipline of the regulator to avoid being sanction for the related offences. This paper reviews theory to link practice towards money laundering risk assessment of banking customers ...
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...Since the 1970s financial regulators around the world have increasingly focused on introducing Anti Money Laundering (“AML”) measures to fight organised crime and tax evasion. While several national and international acts have set a legal framework for enforcement, the terrorist attacks on 11th September 2001 (“9/11”) have established fighting terrorist financing as another major objective among regulators. In subsequent years AML measures have constantly been revised to adjust to the complexity of the international financial markets. As a result financial institutions have to cope with additional costs, more difficult customer relations and legal as well as geographical constraints. More comprehensive customer due diligence and complex mandatory monitoring system in particular cause difficulties for the banking sector. Consequently several big institutions such as HSBC and Citigroup have already been fined for failing to comply with AML laws. Regulations have changed the financial sector. This essay will analyse the impact of the 9/11 attacks on the regulatory framework as well as the effects of AML on the financial industry. Page 3 of 16 2. MEASURES TAKEN AML has been on the agenda of regulators well before 9/11. However, the actions of prosecutors were more focused on fighting organised crime, drug and weapon dealing as well as tax evasion. 9/11 shifted the attention towards fighting terrorism and initiated Counter Terrorist Financing (“CTF”) laws. It was not until 9/11...
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...delivery, and similar material; and (C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331 [31 USCS §§ 5316 and 5331], checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form." Source : http://definitions.uslegal.com/m/monetary-instruments/ What is Laundering of Monetary Insruments? Money laundering refers to a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money. The money laundering process can be broken down into three stages. First, the illegal activity that garners the money places it in the launderer’s hands. Second, the launderer passes the money through a complex scheme of transactions to obscure who initially received the money from the criminal enterprise. Third, the scheme returns the money to the launderer in an obscure and indirect way. Tax evasion and false accounting practices constitute common types of money laundering. Often, criminals achieve these objectives through the use of shell companies,holding companies, and offshore accounts. A shell company is an incorporated company that possesses no significant assets and does not perform any significant operations. To launder money, the shell company purports to perform some service that would reasonably require its customers to often pay with cash. Cash transactions increase the anonymity of customers and therefore...
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