Method of Money Laundering

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  • Topic: Money laundering, Bank Secrecy Act, Offshore bank
  • Pages : 3 (866 words )
  • Download(s) : 105
  • Published : February 14, 2013
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Method of money laundering
Structuring deposits
The Bank Secrecy Act of 1970 requires banks to report any deposits exceeding $10,000.01. This is not a problem for most of us, but it is a big barrier to money-laundering criminals looking to rid themselves of some cumbersome currency. Launderers will hire low-level lackeys to make multiple small deposits, either on different days or at various branches on the same day to work around this pesky law that attempts to deter money laundering, It is a complex, time-consuming way to launder money, and one that has been rendered even more difficult by computer algorithms that look for suspicious deposit behavior and raise an red flag when one is found.

Far more exciting and global in the practice of money laundering is the use of offshore and overseas banks. Nations like the Cayman Islands, Bahamas and Panama are very accommodating to criminals looking to legitimize their cash; these nations are unrestricted with regards to burdensome banking laws and anti-laundering procedures, which ultimately helps hide the launderers behind strict veils of secrecy. Opening accounts in a number of these offshore accounts allows launderers to move their money around and create a nearly impenetrable defense against curious investigators.

Some countries (China and Pakistan among others) have a history of well-established underground banks that have been accepting deposits from sketchy clients for centuries. They legally operate outside of the mainstream banking system and outside the control of the government. There is often no paper work, just the reputation of the principals involved.

Shell companies
Enterprising criminals looking to legalize their cash can set up various companies that exist for the sole purpose of money laundering. These so-called shell companies often offer some sort of service that can easily be fudged and usually accepts cash as payment when doing legitimate business (beauty salons and trades like...
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