Money laundering (ML) is one of the biggest financial crimes and has been with us for as long as we have been using money. But what is ML? Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayMoney laundering - a concept first used in the 1980s in the United States regarding proceeds from drug trafficking and is the process of converting illegal money into “legal money”. There is a legend according to which the term "money laundering" appeared in the United States during the dry law period, when the Chicago mafia received large revenues from the illegal alcohol trade and other sources. Apparently at that time a scheme was developed according to which these revenues were officially recorded as the income of a network of laundromats. Laundry services were paid for in cash, so it was impossible to track how many people actually used them, which allowed gangsters to "mix" criminal money into legal laundry proceeds. In association with laundering, the process of turning illegal money into legal money has been called money laundering, i.e. "laundering" or "laundering". However, this is just a myth. Moreover, some researchers believe that this is a legend, and the term "money laundering" is called so because it really describes the process: illegal, "dirty" money, due to the "laundered" chain of transactions, becomes "clean". In other words, the source of the illegally obtained money is hidden through various transfers and transactions, and the money appears to have been received legally. ML has only one main objective: to transform the profits of crime into money and/or property and consists of 3 phases; even if it's a solo process. Below we can see 3 phases: Placement Stratification Integration. In the first phase (Placement) criminals place dirty money in legitimate financial institutions in the form of cash bank deposits. Further in the layering, with the help of electronic transactions, money is sent between different accounts, transferred to another currency, which has already been purchased for expensive goods, to change the form of money. To reduce the traceability of money, money entering the banking system is separated into small quantities and transferred from one bank to another, from one country to another. In the final stage (Integration) the laundered money is legitimately introduced into the economy via bank transfer to the accounts of companies used for laundering or by selling expensive goods purchased in the second stage. Why launder money? The money should appear "clean", because criminals do not want to leave traces or be discovered. The mafia and terrorists do not spare money, because if the legal structures find something and start investigating, then all other criminal activities will open, and the punishment for anything is more severe than for money laundering itself. The people who usually deal with money laundering are money dealers, embezzlers, corrupt politicians, officials, fraudsters, thieves and terrorists. The first laundering took place through the casino: with the usual proceeds of gambling houses in the United States and Cuba, dirty money allegedly lost by customers was "mixed". Subsequently, the great mafioso Meir Lansky (born Meir Sukhomlyansky from Grodno, known as the "mafia accountant", one of the founders of Las Vegas) created a plan using the banking system: he opened a number of (anonymous) accounts in Swiss banks, he invested large sums there, and then received loans from the same banks, which he showed as the source of his money. Next, the loansthey were repaid at the expense of money in numbered accounts. Thus the dirty money, passing through the bank, became clean, that is, legal. In reality, the mafia's interest in the official cleaning of incomes manifested itself only after the arrest of Al Capone in 1931 on charges of non-payment of income tax: government agents managed to demonstrate that his expenses did not correspond to official income. , which means it covered some of the income gained from taxation. Moreover, the first use of the term "money laundering" in the press was recorded only in 1973 in the materials of the British newspaper The Guardian about Watergate CCandal. It turned out that funds from the Republican Party's unofficial campaign fund, which included anonymous donations (prohibited by US law), through the personal accounts of people involved in the operation in the US and Mexico, turned into contributions to a official fund. In 1993, the United Nations report states that the main characteristics of money laundering, which has acquired immense proportions thanks to the organization of criminal operations, are its globality, flexibility, the use of new technologies and professional assistance, ingenuity and vast resources. In legal practice, the term "money laundering" was first used in 1982 in the US case "US v 4 255 625.39dollars" (551 F Supp.314). As part of this case, it was established that the American company Sonal, owned by several Colombians, transported money from drug trafficking through its account at Capital Bank (Miami, USA). Drug traffickers exported dirty dollars from the United States to Colombia and exchanged them for Colombian pesos in a special exchange company owned by a certain Carlos Molina (the Colombians did not care about the origin of the money). Subsequently, the dollars returned to the United States in cash and were deposited into the account of a relatively solid company. Molina subsequently received checks of various amounts signed by the executives of this company and paid their expenses (including the purchase of pesos for further transactions with the drug mafia). More than 200 million dollars passed through the company's account, but the US authorities were only able to trace just over 4 million. Subsequently (until 2001), the authorities of various states mainly fought against drug money laundering. trade. As a result of the "War on Drugs", unleashed by developed countries, the profits of drug cartels increased significantly, which required the creation of global financial networks for their laundering. As a result, the attention of state bodies to the problem of money laundering has increased. After the terrorist attack in the United States on September 11, 2001, money spent to finance terrorism, including through the use of charitable, religious and non-governmental organizations and underground quasi-banking systems ("Hawala", "Hundi"), has fallen into the spotlight on anti-money laundering bodies. Below I mention some methods used for money laundering. Method 1. The Colombian marketOn the Colombian black market currency is exchanged: the money from the sale of drugs was exchanged for Colombian Pesos, other pesos were purchased various expensive goods, ultimately sold for dollars in cash. This is one of the most established mechanisms of money laundering obtained from drug sales in the Western Hemisphere. Method 2. Structured Deposits Large amounts are divided into small ones (under $10,000) and deposited in various banks at different times. In the United States you can make a cash deposit in a bank of no more than $10,000 at a time, otherwisethe bank is obligated to report the transaction to the federal government. Method 3. Foreign BanksIn this method, a shadow (underground) banking system is used. Illegal sums of money are transferred to offshore accounts in countries with banking secrecy laws, in other words, where it is allowed to invest money in the bank anonymously. Basically, banks in the Cayman Islands, Panama, Bahamas, Bahrain, Singapore and Hong Kong are used for this purpose. In Asia there are banks that offer a legal alternative system that allows customers to deposit, withdraw and transfer money without any accompanying documentation, which leaves no traceability. Method 4. One day company The cash deposit is paid in the name of a shell company, then it is withdrawn to invest in a legitimate business with the help of counterfeit invoices and balance sheets. Such companies are opened by criminals only for money laundering, but sometimes they can be a legitimate business where "investments" are made, for example, brokerage firms, casinos, bars, strip clubs. All these activities are associated with a large amount of cash, which helps illegal means to simply "dissolve". Money laundering is difficult to control, because it can be used by financial institutions in any country. This is a serious problem that requires the efforts of all countries of the world, but in many states the concept of bank secrecy still exists, which does not allow the US government to track money that has already gone abroad. Legalized money or proceeds of crime are used by organized crime to attract money or other assets that have no direct link to a criminal source of income. However, money acquired through legalization (laundering) is also linked to criminal activities. It should not be forgotten that these funds are an indispensable element for the financing of terrorism. Money laundering as a form of crime attracted universal attention in the 1980s, especially in the context of drug trafficking. Growing concern about huge criminal profits and the spread of drug addiction in the West has led governments to create laws that prevent money laundering. Furthermore, it has become clear that, due to the huge illegal profits, criminal organizations have managed to corrupt the authorities and influence them at different levels. Money laundering is a global phenomenon, facilitated by the close relationship of international financial centers around the world. In addition, it is worth remembering that in the constant pursuit of greater profits, money laundering extends to all new spheres of criminal activity. The grandiose nature of this "industry" inspires distrust: according to the International Monetary Fund, its volume is equal to 2-5% of the gross world product (or about 2 trillion dollars), having penetrated almost all strata of society. And the same can be said for Scotland too. The recent investigation by English newspapers has provided undeniable evidence that criminals have brought everyone into their chain, from tanning salons located in backyards to venerable banks located in central streets, even if the latter do not suspect that they are being used. Scammers can also be small-time gangsters, major drug dealers and international terrorists. All of them are real money laundering experts. International companies can also handle the transfer and redistribution of funds for terrorist organizations such as Al-Qaeda. The worst thing is that no one, not even the most respected financial institutions, is safe from the money laundering network, because criminalssophisticated people resort to augmenting complex technologies and legal loopholes for their own benefit. For example, in 2002 the Royal Bank of Scotland was forced to pay a fine of £750,000 for failing to provide a rigorous enough system to vet account holders, which was exactly the loophole it should use to launder money. Until relatively recently some banks were quite relaxed about the requirement to report all "suspicious" transactions. But after it became clear that P1.3 billion stolen from Nigeria by former dictator General Sani Abacha (Sani Abacha), had been transported through the City of London, the situation began to change. Then came the attack on the World Trade Center, which forced the British government to freeze funds amounting to around £6.5 million, which could be associated with terrorist organisations. According to lawyer Steven Philippsohn, senior partner at Philippsohn Crawfords and Berwald and fraud expert, Western governments have entered a very difficult war, as today's virtual banking operations are particularly conducive to money laundering. Philippson also emphasizes that currently, at a rather early stage of the development of electronic commerce, the amount of money laundering through virtual systems is already estimated at 50 billion dollars per year. "The most important advantage of the Internet is complete anonymity and speed of transactions," says Philippson. “Now anyone can log into the system, open an account and immediately make 4,000 transactions for £4,000, because it is exactly above that amount in the UK that the bank is required to notify the Financial Services Commission.” The development of virtual banking has brought money laundering to a new level, however this activity has been at its peak for several years. Criminals usually "legitimize" the money obtained from robberies and drug dealing by simply purchasing or creating a company or property. Thus the Glasgow gangster Tam McGraw (nicknamed Licensee) created his empire: investing first in the "Caravel" Pub" and then in a fleet of taxis called "Mac's Cabs". "It happens that some brewery announces a loan - in which case the Initial payment is made in the form of "legal" cash. The point is to cover the dirty money through legal means - "on paper, a company may be owned by some figurehead who doesn't have a police file and who takes a beating if suddenly everything comes out." However , a growing number of gangsters prefer to diversify their interests. “Now in the money laundering business the most popular are tanning salons, there are a huge number of opportunities for counterfeiting,” says one of the former members of the Scottish detachment “Suppose the client has to pay 10 pounds for the session of 15 minutes. If at the same time 10 units of solarium are made from 7 in the morning to midnight, can it be said that the daily turnover amounts to 6,000? , it's only £2,000. You can wash a lot of money here very quickly." Although in 1993 English banks and other financial institutions were required to verify the identity of the customer opening a new account and report all "suspicious" transactions, however these rules are not always followed strictly. Widespread fear of terrorism has led to the expansion of the powers of the Financial Services Commission and the emergence of the Income from Crime Act, which is intended to facilitate the confiscation of funds from drug traffickers and other criminals. From now on, accountants who fail to report their suspicions of possible money laundering can be sentenced to prison for up to five years..