Verified Document

Combating Money Laundering - Imperative To Cut Thesis

Combating Money Laundering - Imperative to Cut down on Terrorism FATF - Financial Action Task Force

GAO - General Accounting Office

UGAO - United States General Accounting Office

OECD - Organization of Economic Cooperation and Development

IFA - International Federation of Accountants

Money Laundering

What is Money Laundering?

The act of converting money earned from illegal activities such as drugs, arms smuggling and other crimes, including insider trading, embezzlement, bribery and computer fraud schemes as well as fraudulent pyramid marketing schemes, all of which generate vast sums money which can be moved between locations only by what is called money laundering. Since these large amounts are not declared to the government, and since these perpetrators have no intention of paying tax at any level to any authority, they devise a million ways to break their profits into different entities, invest and spend the money without falling into the hands of the police. Diverse methods are used for laundering this money, which they accomplish by disguising the sources changing the forms, or moving to locations, which are less likely to attract attention. The myth goes that the word money laundering was derived from Al Capone's string of launderettes in Chicago, which were used by him to input and legitimize his illegal income from extortion, prostitution and gambling rackets. However, the truth is that money laundering has acquired this name for its involvement with removal of stains and smells acquired by the money through its close proximity to the criminals who handle it. Money laundering is a process which criminals use to camouflage the origin, ownership and the source of criminal activity behind its generation. Their ultimate intention is to obtain a cover to legitimize the money. J.D. McLean defined money laundering as under (Rowan, et al., 1994):

"Although the proceeds of crime will be kept as capital for further criminal ventures, the sophisticated offender will wish to use the rest for other purposes. If this is to be done without running a risk of detection, the money which represents the proceeds of the original crime must be "laundered"; put into a state in which it appears...

Some of the more unscrupulous launderers will discretely solicit the cooperation of a legitimate businessman to allow them to use his account for depositing, withdrawing and transacting funds for a hefty compensation. Another way to use their money is to approach a business and request them to engineer transactions by virtue of which regular amounts are deposited into their account. At a later stage, the business returns the money as payment for fictitious purchase of goods. Still another way of money laundering is to place a dummy order for a product, with 60 to 75% advance, which there is neither an intention to buy nor any to sell. Therefore, at the end of a mandatory prearranged period of 3 months or so, the launderer, who has paid the advance, will affect a cancellation of the order and demand a refund from the business, less a penalty; the money is now returned clean. Sadly, it has been established that money laundering has assumed the third position in terms of value in the U.S., and almost 90% of the U.S. currency notes are tainted with drug money IFA. (2004).
Chapter 2

Combat Money Laundering

Steps taken by the U.S.A. To combat this menace

Frank discussions between the officers from the GAO and those of the treasury, justice and financial regulatory officers revealed that in spite of the earlier decisions accruing from the erstwhile money laundering strategy meetings, clear results…

Sources used in this document:
References

IFA. (2004). Anti-Money Laundering, International Federation of Accounts, 2nd Edition, ISBN 1-931949-29-8, pgs. 4-6, 2004.

USGAO, (2003). Combating Money Laundering: Opportunities Exist to Improve the National Strategy, GAO-03-813, pgs. 1-55.

Rowan, B.D. And Graham, S. (1994). Money Laundering: A practical guide to the new legislation, Chapman & Hall, London, xii and 304pp, 1994.

Myers, M. (1998), "International Strategies to Combat Money Laundering," International Symposium on the Prevention and Control of Financial Fraud, Beijing, 19-22 October, 1998.
Cite this Document:
Copy Bibliography Citation

Related Documents

Combating Future Terrorism
Words: 1028 Length: 3 Document Type: Research Paper

Combating Future Terrorism The Continuing Threat Posed by Islamic Terrorists Brinkley. J. (2013). Islamic Terror: Decentralized, Franchised, Global. World Affairs, 176(2), Professor of Journalism Joel Brinkley explains that many countries around the world have been attacked by Muslim radicals (he includes Tanzania, where extremists beheaded a Christian pastor because he was training to become a meat butcher and the radicals asserted this trade was "theirs alone"), and that "…jihadist atrocities" have become a

Offshore Financial Centres and Their
Words: 22477 Length: 60 Document Type: Dissertation

Because the home country is not required to reimburse foreign depositors for losses, there is no corresponding financial penalty for lax supervision; there is, though, a benefit to the country with lenient regulatory policies because of increased revenues generated and the employment opportunities these services provide (Edwards 1999). Furthermore, banks seeking to conduct multinational business are attracted to countries where incorporation laws and the regulatory framework offer less regulatory oversight

IRS-CID the Internal Revenue Service
Words: 5371 Length: 16 Document Type: Term Paper

There are ten Fraud Detection Centers across the United States, and these are meant to detect refund fraud and to identify prevention measures. Each of these offices has a Resident Agent in Charge to direct, monitor, and coordinate operations supporting electronic and paper tax filing, and each Center performs activities that include educating Submission Processing Center and Customer Service Center personnel on fraud awareness and detection. Criminal investigation in the agency

Marketing and Economics Agricultural
Words: 18779 Length: 68 Document Type: Term Paper

Origins, History of the IMF The International Monetary Fund was first conceived between July 1-22, 1944, at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. The conference was attended by representatives of 45 nations, which were called together in order to plan and lay the groundwork for a cooperative economic framework to solve global financial crises before they occur. One key reason for the conference was to

Terrorism Memo to the Department of Homeland
Words: 1040 Length: 3 Document Type: Term Paper

Terrorism Memo to the Department of Homeland Security: There are federal statutes on the books that can help address the way that terrorists finance their draconian operations. This document delves into the specifics of how financing can be cut off or at least addressed to some extent, enough to bottle up terrorist movements which of course require money. What is terrorist financing? Jeff Breinholt coordinated the Department of Justice Terrorist Financing Task Force

Financing Terrorism: America's Unique Position
Words: 3643 Length: 11 Document Type: Research Paper

Simply put, the September 11th attacks would never have occurred without the prior development of the group's worldwide infrastructure, which consists of truly billions of dollars to establish and maintain (Ehrenfeld, 2003). Enormous amounts of money have been spent on recruitment, training camps, purchasing weapons, training on weapons, creating unconventional weapons, gathering intelligence, promoting Islamist propaganda and other activities (Ehrenfeld, 2003). The Last Five Years One of the things that the

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now