Check cashing/wiring outlets
Foreign currency exchanges
Art dealers
Dealers of precious metals
Automobile dealers
Boat dealers
Dealers of precious gems
Real estate agents or brokers
The history of money laundering is the story of creative
criminals staying one step ahead of the ever-tightening grip of the Feds. Until recently
money laundering was primarily a physical activity, testing how creatively criminals could
move physical dollars from Point A to Point B. The government began cracking down in 1970
with the Bank Secrecy Act, which required the filing of a report every time a cash
transaction exceeded $10,000.
However, criminals quickly found a loophole in this law and
began making deposits just under the $10,000 limit, employing "smurfs" or
couriers to spread the cash drops among different tellers at different banks in many
cities. The government then attempted to end such "structuring" of transactions
with the Money Laundering Control Act of 1986, requiring the filing of a report even if an
employee only "has knowledge of" an attempt to purposely deposit under the limit
to avoid the filing.
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High Tech Cleaning Methods
Enterprising criminals, motivated to adapt, moved
wholeheartedly into the world of electronic transfers. Electronic or wire transfers allow
legitimate customers and money launderers alike to swiftly and safely transfer funds
around the globe. With an estimated 700,000 wires occurring each day in the United States
moving over $2 trillion, it is easy for criminals to hide their transactions. It is
thought that 1 in every 1000 wires involves laundered money.
Another advantage of wires is the link to offshore banks.
Many banks in exotic locations such as Antigua or Seychelles are not discriminating about
whom they allow to deposit in their banks. In fact, they actively promote a "Don't
ask, don't tell" policy. While there are many legitimate business reasons for using
offshore banks, they are especially attractive to money launderers because of the
anonymity they afford. Once money is deposited in these banks, no questions asked, it can
be wire transferred to any bank in the world in a perfectly legitimate transaction.
The government is tightening regulations surrounding wire
transfers. Until recently, wires were not subject to the same reporting requirements as
cash transactions. Although more information is now required about the parties involved in
each transaction, the government is only able to access this information with a subpoena
or a search warrant.
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Attempts by federal investigators to access such
information could scare away foreign capital and cause legitimate transactions to come
under scrutiny. With this in mind, criminals are making the leap to the newest medium
which allows them to launder their money: the Internet (see related story).
Applying a "Permanent Press"
The only way to uncover potential money laundering in your
organization is through an intense financial investigation. A Forensic Accountant may be
your best shot at uncovering the information you need. Remember, money launderers create
multiple layers of transactions to obscure the source of their income.
Forensic Accountants are experienced at sifting through
these layers and following electronic trails of evidence to spot unusual patterns or
activity. They are able to see the big picture of the investigation and find clues that an
ordinary accountant might miss. As more information about wires is required, the mountain
of data will only grow larger. Forensic Accountants are uniquely trained to keep up with
the ever-changing ways of the professional money launderer. By helping you clean your
organization from the inside, a Forensic Accountant can help take the steam out of any
money launderer who dares to cross your path.
K |
Michael
G. Kessler & Associates recently opened a London Office: 28 Grosvenor
Street, London W1X9FE, Voice: (011) 44 171 917 9690 Fax: (011) 44 171
917 6002.
