AMLCA Quiz 22

In the famous 1920s gangster era of American history, the term money laundering was coined. During gambling, prostitution and sales of prohibition alcohol, there was a lot of cash that required to be laundering. New methods had to be developed so that the government did not become suspicious about the true nature of the gangster’s fund.

The term money laundering has been around since the early stages of the 20th century and its ideas and economics have been around for thousands of years. Four thousand years ago, ruling parties took advantage of merchants to get more funds in China and other Asian countries.

Money laundering is used by bad guys to making dirty money appear to be legitimate. This is the reason it is called laundering, as in cleaning.

The legitimate financial system is the safest place for the bad guys to keep their wealth safe. If a bad guy kept his loot under his mattress then guaranteed, other bad guys would rip him off.

The bad guys need to move their looted money around the globe quickly. That is exactly money service businesses and banks are set to do this task legitimately.

The Palermo Convention is a resolution that is adopted by the United Nations Convention against Transnational Organized Crime that was held in Palermo, Italy in 2000.

There are some players that play their role in money laundering. These players are called smurfs, mules, reshippers or some other low-level those who want to be bad guys. Smurfs are the people who are used by money launderers to make transactions (usually deposits) below the reporting threshold of $10,000 while the mules are the people whose job it is to simply transport illegal goods, whether money, guns or drugs and reshipper is an intermediary who receives items and forwards them to another destination.

There are some players that play their role in money laundering. These players are called smurfs, mules, reshippers or some other low-level those who want to be bad guys. Smurfs are the people who are used by money launderers to make transactions (usually deposits) below the reporting threshold of $10,000 while the mules are the people whose job it is to simply transport illegal goods, whether money, guns or drugs and reshipper is an intermediary who receives items and forwards them to another destination.

There are some players that play their role in money laundering. These players are called smurfs, mules, reshippers or some other low-level those who want to be bad guys. Smurfs are the people who are used by money launderers to make transactions (usually deposits) below the reporting threshold of $10,000 while the mules are the people whose job it is to simply transport illegal goods, whether money, guns or drugs and reshipper is an intermediary who receives items and forwards them to another destination.

Professional money launderers are very smart to use mules so they can limit the amount of information that any one person in their employ has.

Just imagine how big an issue is money laundering, it is estimated that it is about a $2 trillion a year industry. Let’s look at this in another way to understand the amount of money. A single $1 bill (US) is approximately .0004 of an inch. However, one million single dollar bills would be approximately 2/3 of a mile high or about the size of two Empire State Buildings stacked on top of each other. The height of one trillion dollar bills would be approximately 134,000 miles high. That is a little more than halfway to the moon. So, $2 trillion would take us right up to the Sea of Tranquility.

Just imagine how big an issue is money laundering, it is estimated that it is about a $2 trillion a year industry. Let’s look at this in another way to understand the amount of money. A single $1 bill (US) is approximately .0004 of an inch. However, one million single dollar bills would be approximately 2/3 of a mile high or about the size of two Empire State Buildings stacked on top of each other. The height of one trillion dollar bills would be approximately 134,000 miles high. That is a little more than halfway to the moon. So, $2 trillion would take us right up to the Sea of Tranquility.

Just imagine how big an issue is money laundering, it is estimated that it is about a $2 trillion a year industry. Let’s look at this in another way to understand the amount of money. A single $1 bill (US) is approximately .0004 of an inch. However, one million single dollar bills would be approximately 2/3 of a mile high or about the size of two Empire State Buildings stacked on top of each other. The height of one trillion dollar bills would be approximately 134,000 miles high. That is a little more than halfway to the moon. So, $2 trillion would take us right up to the Sea of Tranquility.

Just imagine how big an issue is money laundering, it is estimated that it is about a $2 trillion a year industry. Let’s look at this in another way to understand the amount of money. A single $1 bill (US) is approximately .0004 of an inch. However, one million single dollar bills would be approximately 2/3 of a mile high or about the size of two Empire State Buildings stacked on top of each other. The height of one trillion dollar bills would be approximately 134,000 miles high. That is a little more than halfway to the moon. So, $2 trillion would take us right up to the Sea of Tranquility.

Money laundering is the process in which a large amount of illegally obtained money is given the appearance of having originated from a legitimate source. It can be described as the criminal’s construct the appearance that ill-gotten gains are actually theirs to spend.

The following are the three stages of money laundering that are the foundation to understand the concept of money laundering:-

(a) Placement.
(b) Layering.
(c) Integration.

Placement is the first stage of money laundering. This is the act of physically taking bulk cash proceeds and bringing them to a financial institution for deposit or transfer. The second stage of the three stages of money laundering is layering. In the stage of layering, the launderer is to make numerous transactions, possibly involving several front companies and entities. After that, the launderer is attempting to distance himself from the money and make it harder for the authorities to track. Integration is the third and final phase of the money laundering process. At this phase, the layered monies are incorporated into the legitimate financial world and assimilated with the assets of the legitimate system. In other words, this stage is the spending day for the bad guys and giant payday for the launderers.

The most vulnerable to detection by law enforcement is the phase of placement. It is referred to be as a “choke” point.

Separate locations are usually used by the proficient dealer, one for the drugs and one for the money and these locations shall never meet and this is called a stash house.

Separate locations are usually used by the proficient dealer, one for the drugs and one for the money and these locations shall never meet and this is called a stash house.

Placement is the first stage of money laundering. This is the act of physically taking bulk cash proceeds and bringing them to a financial institution for deposit or transfer. The second stage of the three stages of money laundering is layering. In the stage of layering, the launderer is to make numerous transactions, possibly involving several front companies and entities. After that, the launderer is attempting to distance himself from the money and make it harder for the authorities to track. Integration is the third and final phase of the money laundering process. At this phase, the layered monies are incorporated into the legitimate financial world and assimilated with the assets of the legitimate system. In other words, this stage is the spending day for the bad guys and giant payday for the launderers.

Prepaid cards are formerly referred to as stored-value cards. These cards are readily available in many retail establishments and these cards have two types. The first type is a closed-loop card that can be used only for the purchase of goods or services at a particular establishment. These cards are totally anonymous. The second type is an open-loop card that can be used at a variety of different stores or could be a payroll card. This type of card may be funded by a bank account that is less risky because the bank will conduct due diligence on its customer. However, the card may be funded by money orders or cash that would be anonymous and have no trail to follow. Open-loop or closed-loop cards are divided into the following two subgroups:-

(a) Reloadable cards: These cards maintain possession of the same cards, the owner can have value added to the card.
(b) Nonreloadable cards: These cards are good only for the purchase amount of the cards.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

Money launderers use countries with such strong bank secrecy rules is because of the United States adoption of the Bank Secrecy Act (BSA). In the year of 1970, the United States passes the Bank Secrecy Act (BSA) that required all U.S banks to maintain appropriate bank records for a minimum of five years that is sufficient for a customer’s account activity to be reconstructed. All those cash transactions which are greater than $10,000 must be reported to the Treasury Department. This procedure done on a form called a currency transaction report (CTR). In the end all subject transporting cash over $10,000 into or out of the United States are required to complete a report with the U.S Customs services.

The Financial Action Task Force (FATF) is a leader in Antimony laundering (AML) efforts on a global scale at the international level. It has created the FATF’s 40 recommendations as a guideline so countries have an Antimony laundering (AML) template to follow and fight against money laundering.

The Financial Action Task Force (FATF) is a leader in Antimony laundering (AML) efforts on a global scale at the international level. It has created the FATF’s 40 recommendations as a guideline so countries have an Antimony laundering (AML) template to follow and fight against money laundering.