Money laundering

Extracted Attributes

• Common Methods

  Shell companies, structuring (smurfing), bulk cash smuggling, real estate, and virtual currencies

• Primary Stages

  Placement, Layering, and Integration

• UK Legal Definition

  Process by which proceeds of crime are converted into assets appearing to have a legitimate origin

• US Legal Definition

  Financial transactions designed to hide the identity, source, or destination of illegally gained money

• International Regulator

  Financial Action Task Force (FATF)

• Reporting Threshold (US)

  Transactions below $10,000 (often $9,900) used in structuring to avoid detection

Timeline

• The UN Vienna Convention Article 3.1 defines money laundering as the conversion or transfer of property derived from offenses to conceal illicit origins. (Source: Web Search (UNODC))

  1988-12-20

• A controversial nonprosecution agreement is reached for Jeffrey Epstein, whose influence was later linked to global money laundering networks. (Source: Document 7f81c1c7-1e8b-40e7-a538-3ea6083eee78)

  2007-01-01

• The U.S. Supreme Court clarifies the scope of money laundering in Cuellar v. United States and United States v. Santos, defining 'proceeds' as criminal profits. (Source: Web Search (Cornell Law))

  2008-06-02

• An FBI affidavit is filed in the Northern District of California alleging money laundering associations with the Chee Kung Tong organization. (Source: Web Search (Wikipedia))

  2014-03-24

Money laundering

Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds into a seemingly legitimate source, usually through a front organization. Money laundering is ipso facto illegal; the acts generating the money almost always are themselves criminal in some way (for if not, the money would not need to be laundered). As financial crime has become more complex and financial intelligence is more important in combating international crime and terrorism, money laundering has become a prominent political, economic, and legal debate. Most countries implement some anti-money-laundering measures. 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 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. In United States law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. In United Kingdom law, the common law definition is wider. The act is defined as "the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises".

Web Search Results

• Money laundering - Wikipedia

  Reverse money laundering is a process that disguises a legitimate source of funds that are to be used for illegal purposes. It is usually perpetrated for the purpose of financing terrorism but can be also used by criminal organizations that have invested in legal businesses and would like to withdraw legitimate funds from official circulation. Unaccounted cash received via disguising financial transactions is not included in official financial reporting and could be used to evade taxes, hand in bribes and pay "under-the-table" salaries. For example, in an affidavit filed on 24 March 2014 in United States District Court, Northern California, San Francisco Division, FBI special agent Emmanuel V. Pascua alleged that several people associated with the Chee Kung Tong organization, and [...] Structuring: Often known as smurfing, is a method of placement whereby cash is broken into smaller deposits of money, used to defeat suspicion of money laundering and to avoid anti-money laundering reporting requirements. A sub-component of this is to use smaller amounts of cash to purchase bearer instruments, such as money orders, and then ultimately deposit those, again in small amounts. Bulk cash smuggling: This involves physically smuggling cash to another jurisdiction and depositing it in a financial institution, such as an offshore bank, that offers greater bank secrecy or less rigorous money laundering enforcement. [...] Money laundering typically involves three steps: The first involves introducing cash into the financial system by some means ("placement"); the second involves carrying out complex financial transactions to camouflage the illegal source of the cash ("layering"); and finally, acquiring wealth generated from the transactions of the illicit funds ("integration"). Some of these steps may be omitted, depending on the circumstances. For example, non-cash proceeds that are already in the financial system would not need to be placed. According to the United States Treasury Department:

• Examples of Money Laundering and How to Prevent It - Entrust

  ## Grasping the basics: what is money laundering? Money laundering, a critical concern in financial crime, is the process used by criminals to disguise the origins of illegal funds. Its root cause is straightforward: to evade prosecution or taxation on unlawful income. Major criminal organizations, generating cash from illegal activities such as theft or trafficking, need to integrate these funds into the legitimate financial system. This integration involves disguising or “cleaning” the money through businesses or banks. ## Types of money laundering crimes and their impact [...] 2. Layering: Layering in money laundering is essentially the process of creating a paper trail that separates the funds from their criminal origin and protects the identities of the criminals. This might include using multiple banks or accounts, having individuals act as intermediaries, using shell corporations or legitimate businesses, and making investments in goods like art and jewelry. When funds pass through multiple accounts or have been converted and re-converted into different currencies, this is a clear sign to regulators and law enforcement that money laundering may be at work. Entities like banks and lenders also have an obligation to perform adequate due diligence and confirm customer identity to detect these kinds of activities. [...] 1. Placement: In this first stage, the dirty cash needs to be introduced (“placed”) into the economic system. The three money laundering examples we shared earlier of cash business, real estate, and gambling are all examples of placement methods. Others include paying off debt with the cash, or using a foreign currency exchange to convert portions of the cash into another currency. Some money launderers might simply put the cash in a suitcase and take it to a country where there is less regulatory oversight. No matter how they attempt to place the cash, it is during this phase that money launderers are most likely to be caught. The sudden appearance of a large amount of cash to pay off debt, deposit as business profits, or otherwise place is going to attract the attention of authorities.

• Overview - unodc

  ### Money Laundering Money laundering is the processing of criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardizing their source. Money laundering has been addressed in the UN Vienna 1988 Convention Article 3.1 describing Money Laundering as:_“the conversion or transfer of property, knowing that such property is derived from any offense(s), for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in such offense(s) to evade the legal consequences of his actions”._

• What is money laundering? Definition, examples, & prevention

  4. Real estate: Money launderers can channel their dirty money into real estate, buying property with illegitimate funds and then selling it to recoup clean cash. 5. Professional services: Criminals could use lawyers, accountants or financial advisors to help move or disguise illicit funds. These professionals might create complex financial structures, set up trusts, or help transfer assets, making the original source difficult to trace. 6. Virtual currencies: A bad actor can also use digital currencies like Bitcoin to transfer money anonymously across borders. Criminals may also use crypto wallets or peer-to-peer exchanges to obscure the origin and ownership of illegal funds. [...] ## How money laundering works Money laundering is a relatively simple process. It works by finding a place to house the dirty money, leveraging performative bookkeeping to make it appear as if the money came from legitimate transactions and then returning the clean money for use in the financial system. This involves three specific steps: ### The 3 stages of money laundering The three stages of money laundering are placement, layering and integration. [...] Owning a company with no clear purpose: Shell companies that don’t offer products or services or have unclear business models are often used to obscure the origin and movement of money. These entities may have no physical presence or operate in high-risk jurisdictions. Complex transactions: Layered transactions involving multiple banks, countries or currencies with no apparent economic rationale are a hallmark of the layering stage of money laundering. Watch for rapid movement of funds between unrelated accounts. Making multiple small transactions: Known as structuring or smurfing, this involves breaking up large amounts of money into smaller deposits to avoid triggering reporting thresholds. Repeated transactions below the legal reporting limit (e.g., $9,900) are common.

• money laundering | Wex | US Law | LII / Legal Information Institute

  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 decrease the government’s ability to trace the initial recipient of the dirty money. Money launderers commonly select beauty salons and plumbing services as shell companies. The launderer then deposits the money with the shell company, which deposits it [...] In a pair of 2008 decisions, the U.S. Supreme Court clarified the scope of money laundering under federal statutes. Cuellar v. United States, 553 U.S. 550 (2008), determined that to prove money laundering, prosecutors must show that concealment of money must be for the purpose of concealing ownership, source, or control rather than for some other purpose. In United States v. Santos, 553 U.S. 507 (2008), the Court held that the word “proceeds” in the federal laundering statute referred only to criminal profits and excluded criminal receipts. Thus, the Court reversed a pair of convictions based on money laundering involving the payout of winnings in an illegal gambling ring. [...] Please help us improve our site! No thank you Cornell Law School Search Cornell # money laundering Money laundering refers to a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money. Given the many ways money laundering can be achieved, the regulation of money laundering by the federal government includes a complex web of regulations trying to target money laundering directly and indirectly through criminal punishment and reporting requirements. Money Laundering also is regulated by the Financial Action Task Force (FATF) on the international level and through state level legislation such as the Florida Control of Money Laundering and Terrorist Financing in Financial Institutions Act. #### Money Laundering Generally