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LEARNING AND UNDERSTANDING INTELLIGENCETHE SERIES - PART 3

Intelligence expert

Kevin Coleman continues

our interactive reader

series on intelligence.

This training brief

defines what money

laundering is, analyses

how it is accomplished,

and examines the

various layers involved

hroughout history, trackinglaundered money has led to thecapture of criminals and the breakup of criminal rings, drug cartels,and organised crime gangs. Andalthough money laundering andthe financing of terrorism areclosely related, this briefT

addresses only money laundering. Financingterrorism is covered in a separate training brief.

Money laundering can be simple or verycomplex, but in all cases the object is to utilisefunds from previously committed criminalactivity. Rather than being a crime in itself, it isactually a necessary component to other crimes.

Criminal activity is often focused on financialgain. Criminals cannot openly reveal the origin oftheir profits since they are in fact illegal. Thiscreates the climate for money laundering. Theend result is that profits made via illegal activitiescan be used or invested without the personhaving to divulge the true source of their income.

How Money Laundering isAccomplished

Money laundering can be a lengthy process.Large sums of money made from criminalactivity (bribery, computer fraud schemes,

or converting currency to other types offinancial assets, and reconverting them tocash.

The previous graphic illustrates the five-stepmoney laundering process using transformstechniques.

Finally, during the integration stage, the moneyis put back into the economy. It is at this stagefunds are spent or invested further through realestate or business expenditures.

�

ICE agents escort one of four men arrested on money launderingand immigration charges in an operation targeting a Turkish

organisation. More than a dozen gas stations, mini-marts andresidences in Long Island were searched as part of an

enforcement action targeting an alleged Turkish organised crimering suspected of violating money laundering and immigration

laws to raise and move millions of dollars overseas

embezzlement, insider trading, drug dealing andnumerous other areas) is not immediately spentor simply banked. Some crimes generatesubstantial amounts of cash that could attractunwanted attention from the authorities. Thiscould lead to the source of their wealth. Bydisguising the source of funds, changing theform of funds (cash to gold or physical property)and transferring monies, crime gangs can keeptheir money ‘anonymous’.

The general process followed in moneylaundering involves three steps: placement,

layering and integration. In placement, themonies are broken down into smaller sums.Such amounts attract less, if any, attention. Inmost cases, this simply involves depositingfractions of the total amount into various bankaccounts locally or around the world. It is

MONEY LAUNDERINGMONEY LAUNDERINGcommon practice to limit transaction dollars tounder $8,000 (£6,000). This is done to avoidregulatory thresholds for reporting of high cashvalue transactions.

The next step is layering, effectively distancingoneself from the original source of the money. Inthis stage, the goal is to create a large voidbetween the money and where or how it wasmade. This can be achieved through transforms,

INTEL

3

Multiple

banking

accounts are a

simple, but

effective way

of depositing

small amounts

of money

By Kevin Coleman