THE KESSLER REPORT Continued
A Publication of Michael G. Kessler & Associates, Ltd.
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FraudBusters®
Edition
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Volume 2
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Number 1
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Red Flags of Money Laundering
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Q & A
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Featured expert:
Charles A. Intriago, ESQ
Editor of Money Laundering Alert
1-305-530-0500
www.moneylaundering.com
Q. Can a U.S. company (or individual) be prosecuted for money
laundering if the company received payments that it did not know came
from criminal proceeds?
A. Yes. A recent appellate case held for a money laundering
conviction with no evidence that the defendant "knew" the dirty source
of her customers' funds. The concept that came into play: "willful
blindness," which has been defined as "purposeful and deliberate
contrivance to avoid learning all the facts" (U.S. v. Campbell, 977
F2d 854 (1992).
Q. What is the liability of a business person if he/she
suspects payments received have been generated from illicit
activities?
A. Under the principal U.S. money laundering law, a convicted
money launderer can receive a 20-year prison term and heavy
fine.
K
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Is money laundering happening right
under your nose? Especially if you are in a cash business, deal in
real estate or valuable assets, or are investigating or auditing a
business, you need to know the warning signs:
- Activities that are not consistent with the business.
- Larger cash deposits or purchases than should be expected.
- Withdrawals inconsistent with the cash needs of a business.
- Invoices that are inordinately larger or smaller than would be expected.
- Attempts to avoid reporting requirements.
- Requests to be placed on a cash transaction report (CTR) exemption list.
- Frequent deposits or purchases just under the reporting threshold.
- Unusual fund transfer activities.
- Transfers by attorneys or accountants on behalf of clients.
- Transactions where both parties appear to be related entities.
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- Large or frequent transactions involving offshore banks, foreign countries or apparent shell corporations.
- Bank information that is insufficient or suspicious.
- Accounts in false names or in the name of persons acting for a third party.
- Transaction documentation that appears falsified or not legally correct.
- Reluctance to provide identifying information during an audit.
- Sudden changes in employees’ lifestyles.
- An employee who shows up for work in a shiny, red Mercedes convertible.
- Employees who are resistant to taking vacations.
- Changes in cash needs of business without corresponding increase in CTR’s.
- Increasing use of safety deposit boxes.
- Increased wire transfer activity.
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Copyright © Michael G. Kessler & Associates, Ltd. 1998. All rights
reserved.
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