Money laundering has been around ever since money existed and laws were put in place to avoid fraud. We often see numerous reports about companies or individuals caught breaking the law and being involved in some sort of laundering activity. Banks and governments are constantly working on different technology that can be used to track money launderers and dirty money. The problem is that money laundering compliance is never enough since criminals also take full advantage of technology. They use modern strategies like digital currencies or online gambling in order to launder funds.
Official estimates released by the United Nations Office on Drugs and Crime state that around $2 trillion are laundered every single year around the world. Money laundering can easily allow organized crime to get finances and even gain influence over officials, so it is important that it is properly fought.
Although many different things need to be known about money laundering, some facts that are particularly important are presented in the following paragraphs.
Technology Changes Money Laundering
The internet offers a high level of anonymity. This is especially the case when referring to the use of digital currencies that can offer great resources for launderers to hide the trace of the money used. It is very easy to add dirty money to online marketplaces like gaming platforms to then be cashed out as money that is labeled as being clean.
Such methods are simply updated versions of much older money washing techniques, like the famous mule scam, which had unwitting consumers asked to perform a favor of some kind. Usually, the favor is transferring an asset that can be used by criminals to clean profits by using the accounts of the victim.
Using digital currencies is a new operation that is used by money launderers. Even online gaming can be used. For instance, there were documented cases in which World Of Warcraft was utilized in order to launder money.
Money Laundering Through Real Estate
It is possible to make illicit funds seem to be completely legitimate when real estate transactions are used. This usually involves the use of limited liability companies. These buy real estate and shell companies are utilized in order to move money around. Usually, luxury properties are utilized in order to be able to launder larger amounts of money at the same time.
Honest Organizations Can Be Involved In Illegal Laundering Activities
Most people believe that just shady organizations end up being involved in dishonest money laundering activities. In reality, even large corporations and banks ended up being charged with this crime. A famous case is that of the Wachovia Bank, which ended up settling money laundering allegations in 2010. This was done as the bank made it public that it failed to detect, identify and then report some suspicious transactions.
Other popular banks that ended up being accused of some sort of money laundering include Credit Suisse, Bank of China and HSBC.
The Money Laundering Countries
The US State Department dictates that some countries are of a “primary concern” when it comes to money laundering. Their list includes many nations that have financial firms renowned to launder money. Usually, such activity is handled for drug traffickers but this is not the only source. Surprising countries that are on the list include Russia, China and the United Kingdom. The main countries that are now involved in money laundering activities are China and Russia.
While some countries are more prone to be involved in money laundering activities, it does not mean that there are no cases present in any other country. In fact, many companies in the US were charged with this and had to pay really hefty fees in the process.