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Abstract
Money laundering has been practiced in one form or another for thousands of years, dating back well before the birth of Christ, when highly motivated merchants moved their wealth beyond the confiscatory grasp of local rulers. Only in the recent past was the name ‘money laundering’ given to this financial hocus‐pocus. Popularly believed to have derived from Mafia ownership of Laundromats through which an endless stream of cash generated by extortion, prostitution and gambling flowed, ‘money laundering’ did not attract serious interest until the 1980s, and even then it fell primarily within a drug trafficking context. The phenomenon has pushed its way into the public consciousness as a mechanism used not only by traditional ‘underworld’ organizations, but some corporate and financial sector entities as well as individuals. Perhaps the events of 11 September 2001 did more to change the perception of money laundering as public discourse is now focused on methods used by terrorists to secure financing for their nefarious deeds. In point of fact, transnational criminality generally is exploding on a global level and money laundering is the lynchpin of their success. This article presents an overview summary of basic money laundering methods and is meant to help lay the foundation for further exploration.
Notes
Correspondence: Joseph D. Serio, Sam Houston State University, College of Criminal Justice, Huntsville, TX 77341, USA; E‐mail: [email protected].
See Chris Mathers Crime School: Money Laundering—True Crime Meets the World of Business and Finance Firefly Books, New York, 2004, p 21, and Peter Lilley Dirty Dealing: The Untold Truth about Global Money Laundering, International Crime and Terrorism Kogan Page, London, 2003, p 5.
Jeffrey Robinson The Laundrymen: Inside Money Laundering, the World's Third‐Largest Business Arcade Publishing, New York, 1996, pp 6–9.
See United States v $4,255,625.39 551 F. Supp. 314, SD Fla 1984. See also James R Richards Transnational Criminal Organizations, Cybercrime, and Money Laundering: A Handbook for Law Enforcement Officers, Auditors, and Financial Investigators CRC Press, Boca Raton, 1999, p 43.
Robinson, p 13.
Lilley, p 30.
Office of National Drug Control Policy, http://www.whitehousedrugpolicy.gov/publications/factsht/drug data/index.html.
Lilley, pp 3, 32.
Author interviews with police and border officials from Russia, Ukraine, Tajikistan, Uzbekistan, and the Kyrgyz Republic. See also Slawomir Redo Organized Crime and Its Control in Central Asia Office of International Criminal Justice, Huntsville, Texas, 2004.
US Department of State, Office to Monitor and Combat Trafficking in Persons, http://www.state.gov/g/ tip.
Cited at http://www.worldrevolution.org/Projects/Webguide/GuideArticle.asp?ID=1430.
Federation of American Scientists ‘International Crime Threat Assessment,’ http://www.fas.org/irp/ threat/pub45270chap1.html.
See ‘Money laundering: a banker’s guide to avoiding problems' www.occ.treas.gov/launder/orig.htm.
Financial Action Task Force on Money Laundering (FATF) ‘Basic facts about money laundering’ www..oecd. org/fatf/MLaundering_en.htm.
Richards, p 44.
Australian economist John Walker cited in Lilley, p 33.
Robinson, p 20.
See William R Schroeder ‘Money laundering: a global threat and the international community’s response' FBI Law Enforcement Bulletin, May 2001, p 2.
President's Commission on Organized Crime, Interim Report to the President and the Attorney General ‘The cash connection: organized crime, financial institutions, and money laundering’, 1984, p 7.
Richards, p 44.
This discussion of the three stages of money laundering comes from Joseph D Serio ‘An overview of money laundering’ Crime and Justice International Vol 18, No 68, pp 23–26, December 2002.
Lilley, p 36.
The Minority Staff of the Permanent Subcommittee on Investigations Report on Correspondent Banking ‘A gateway to money laundering’, February 2001, cited in Lilley, p 69.
Lilley, p 50.
Lilley, p 56.
Cited in FATF, 2001–2002, p 2.
Financial Action Task Force on Money Laundering, ‘Report on money laundering typologies, 2001–2002’ 1 February 2002, p. 2.
US Department of Treasury and Department of Justice ‘The 2003 national money laundering strategy’, p 2.
US Department of Treasury and Department of Justice ‘The 2003 national money laundering strategy’, p 3.
Loretta Napoleoni Modern Jihad: Tracing the Dollars Behind the Terror Networks Pluto Press, London, 2003, p 145.
Cited in Rachel Ehrenfeld Funding Evil: How Terrorism is Financed—and How to Stop It, Bonus Books, Chicago, 2003, p 16. See also US Department of Treasury and Department of Justice ‘The 2003 national money laundering strategy’, p 4.
US Department of Treasury and Department of Justice ‘The 2003 national money laundering strategy’, p 1.
Lilley, p xi.
Lilley, p xi.
Schroeder, p 5.
Senator John Kerry The New War: The Web of Crime that Threatens America's Security Simon & Schuster, New York, 1997.
Schroeder, p 5. See also Kerry, p 85.