Fueling global crime: the mechanics of money laundering

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.     

Client privilege,compliance and the rule of law: Swedish lawyers and money laundering prevention

Can, and will, lawyers police their clients? This article aims to shed light on the private front-line workers of the Financial Action Task Force on money laundering (FATF). The analysis is based on a study of how Swedish lawyers perceive and handle obligations to police clients within FATF style risk-based anti-money laundering/counter terrorism (AML/CTF) regulation. We find that the lawyers were reluctant to taking on the responsibility for AML/CTF, and that their front-line work was directed towards being compliant enough. Relatedly, we identify several practices of separation that serve to mediate between the conflicting aims and interests in the everyday of this form of private policing. Another finding is that the lawyers by and large position themselves as knowledgeable actors, and view risks of AML/CTF as knowable. Nevertheless, lawyers experienced a principle clash between being ‘not banks’, and being front-line workers for FATF. In particular, the lawyers perceived their role as front-line workers to be more complex due to their professional norms and ethics on client privilege, and what they saw as the proper role of lawyers, being in conflict with the obligation to report clients and their transactions. In concluding, we suggest that paying more attention to the everyday experience of front-line workers when devising regulatory tools may be a way to promote engagement in ‘true’ crime prevention on their part.     

Was Ellen Wronged?

Imagine a citizen (call her Ellen) engages in conduct the state says is a crime, for example, money laundering. Imagine too that the state of which Ellen is a citizen has decided to make money laundering a crime. Does the state wrong Ellen when it punishes her for money laundering? It depends on what you think about the authority of the criminal law. Most criminal law scholars would probably say that the criminal law as such has no authority. Whatever authority is has depends on how well it adheres to the demands of morality inasmuch as morality is the only authority we have. Thus if morality says that money laundering should not be a crime then the state wrongs Ellen when it punishes her. But if the criminal law as such does have authority, and if in the exercise of its authority the state has decided to make money laundering a crime, then the state does Ellen no wrong when it punishes her.     

The system's rigged — or is it?

From the beginning of the Seventies until almost the end of the Eighties, the Public Prosecution Service in the Netherlands concentrated a major part of its resources on combatting white collar and corporate crime. This effort climaxes in a number of spectacular fraud trials, involving in one case the directors of a large commercial bank, in another high-ranking public officials. Almost all were acquitted. As dramatically as interest in white collar and corporate crime had increased, so too did it decline at the end of the Eighties, until by now public interest in fraud is primarily concerned with social security frauds at one end of the scale, and money laundering by organised crime at the other. This article examines the rise and fall of the fraud-issue in Holland, the parts played by the Public Prosecution Service and the media, and the structural (economic and social) limitations to the criminalisation of white collar and corporate behaviour.     

Human security,transnational crime and human trafficking – Asian and western perspectives,edited by Shiro Okubo and Louise Shelley

Chile began its re-democratisation process in 1990 with a profound lack of counter- money laundering standards. Over time, the nascent political order was compelled to build institutions and generate norms in light of the security principles promoted by foreign actors. However, Chile’s reluctance, for instance, to not create a financial intelligence unit (FIU) until 2003, put the country in a particular stance for assessing criminal proceedings. This article reviews the construction of Chile’s governance of money laundering and focuses specifically on the role played by the Unidad de Análisis Financiero (UAF, Chile’s FIU) in maximising inter-institutional governing relations. The paper reviews three periods of time: the institutionalisation era (1990–2002), the UAF’s formative years (2003–2008) and the policy-building phase (2009–2014). The research concludes by exploring how Chile’s case adds to our qualitative knowledge on democratic network governance.     

Does public criticism Erode trust in the police? The case of Jari Aarnio in the Finnish news media and its effects on the public’s attitudes towards the police

A significant part of the general public’s observations and image concerning the police comes through the mass media. It has been assumed that one factor affecting the level of trust is the way the media handles the police. This article describes the media uproar that arose in Finland in November 2013 about police misconduct, and its effects on the public trust in the police. Two hypotheses were tested in the study: (a) negative publicity always decreases trust, and so, too, in this case; and (b) a change in trust is affected by the public’s independent interpretation of the publicity battle, in which case criticism might also increase trust. The study materials comprise the news coverage concerning the uproar and four opinion surveys collected after it occurred. The first survey was conducted immediately after the press conference of the case in week 48/2013 and the other ones in three-week intervals. The results show that following the uproar, compared to the earlier results of the European Social Survey, trust in the police did not decrease—on the contrary, it increased slightly. Our results suggest that in this case a large part of the audience has taken, to use the term of Stuart Hall, the oppositional position when interpreting negative news about the police.     

The Banco Delta Asia affair: The USA patriot act and allegations of money laundering in Macau

The anti-money laundering laws of the US are the most powerful in the world. Their broad provisions and extra-territorial reach pose risks to financial institutions around the world. Although they are not widely understood, recent cases demonstrate how these laws operate. In this paper I briefly describe Macau, the new gambling capital of the world; analyze the alleged role of Banco Delta Asia (BDA), a small, family-owned bank in Macau, in money laundering on behalf of North Korea; and offer some observations on the controversial use of Section 311 of the USA Patriot Act.     

Power-seeking crime? The professional thief versus the professional launderer

Relating the concept of power to motives and objectives for criminal activities results in different images of criminals and their motivations. In this article, we aim to reflect on two different forms of crime (burglary versus money laundering) starting from a power perspective. We describe how the pursuit of power may or may not be related to crime, perpetrators and the policies that have been developed to prevent or repress these types of crime. By examining the motives behind both burglary and money laundering, we try to make clear how the concept of power and power pursuit leads to different rationales in criminal conduct. We try to determine to what extent ‘rational choice’ plays a role in this respect. As a conclusion, we argue that ‘power’ as such influences patterns of crime, victimisation and societal reactions (by means of criminal policy). The extent to which power accumulation is an outcome of crime, will in part determine the social reaction to crime and as a result, the perceived threat of crime.     

National Security and the Press: The Government's Ability to Prosecute Journalists for the Possession or Publication of National Security Information

In 2006, then Attorney General Alberto R. Gonzales raised the possibility that journalists could be prosecuted for publishing national security information. In addition, the federal government's prosecution of two former lobbyists for the American Israel Public Affairs Committee (AIPAC) for possessing and disseminating national security information has been called an attempt by the government to prosecute individuals who behave like journalists. This article identifies existing laws under which the press could be criminally prosecuted for the possession and/or publication of national security information and describes how the courts have addressed those laws. The article concludes that while there is support for Constitutional protection for journalists in these cases, the Supreme Court of the United States is unlikely to interpret the First Amendment as protecting journalists from prosecution for possessing and/or publishing national security information. Therefore, the article contends that Congress should amend the statutes outlined herein to limit prosecution to instances when there is evidence of intent to harm the United States.     

Money Laundering and Terrorism Financing Risks of Prepaid Cards Instruments?

Advances in information and communication technologies (ICT) have had, and will continue to have, wide-ranging influences on how the banking and finance industry operates. Making payments and transmitting money electronically or online are increasingly popular. An increased dependence on global electronic payment systems and the ability to move large amounts of money expeditiously across different jurisdiction, however, expose both payment processing companies and consumers to an evolving spectrum of threats such as fraud and money laundering. This article considers ways in which prepaid cards can be exploited by organised criminals and terrorists to launder their illicit proceeds of crime, and to transfer money anonymously and instantaneously over the globe for use by terrorist organisations. Risks identified in this article include recruiting card mules (e.g. international students) to purchase prepaid cards, and the mailing or shipping of prepaid cards out of the country without regulators being aware. To minimise risks of abuse by organised criminals and terrorists, legislation will need to adapt to deal with threats that organised criminals and terrorists seek to exploit. Future directions for research in relation to prepaid cards are also identified.

钓鱼报道的真实性与合法性探究

钓鱼报道以其揭露黑幕的便捷而受一些新闻媒体推崇,发展势头方兴未艾,其弊端易被忽略.故从新闻传播学理论与法学理论两方面,以真实性与合法性为逻辑主线,深入分析钓鱼报道的弊端及消弭弊端的基本策略,主张钓鱼报道应以浅层诱惑的钓鱼报道为限、新闻媒体不应对被报道对象施加超出多数民众自制力的深层诱惑以致诱发被报道对象违反道德或法律的意图.     

警察任务法治化之困境及出路

警察任务在警察法治化构建过程当中的地位十分重要,《中华人民共和国人民警察法》第2条有关警察任务的规定在实际操作过程中明显过于宽泛,又受到政治因素的干扰,引起众多对于警察职责职权方面的争议,甚至在某种程度上造成警察在执法中进退两难的境地。警察任务如何执行,既关乎人民生命财产安全、社会秩序健全,更影响到国家在法治化建设进程中如何适当脱离"人治",入轨"法治"的转型。对此,需要通过对当前我国警察任务相关规定的拆解,分析时下警察任务所面临的现实困境,找到问题的根源,结合法治化进程明确警察任务的规范化途径。     

Removing excuses in money laundering

Criminals can use financial facilitators to invest their ill-gotten gains without drawing attention to themselves. These facilitators are experts at getting round anti-money laundering procedures. Because of their expertise and unique capabilities they play an important role in criminal networks. It therefore stands to reason that law enforcement focuses on them. That focus often translates in prosecution when laws are broken. However, what can we do to prevent financial experts in breaking the law? In this article the focus lies on the method of removing excuses. This technique is employed in every day crimes but has not been put to the test in the context of organized crime. Interviews with police officers show that the technique of removing excuses could work under certain conditions. However, it turns out that an important differentiation lies in the sort of activities financial facilitators undertake. Not all financial activities take place in the legal financial-economic system. Instead of distinguishing between the three classical phases of money laundering (placement, layering, integration), a two-pronged focus on those who are involved in cash based transactions and those who construct smokescreens on paper is proposed.     

Cyberfraud and the implications for effective risk-based responses: themes from UK research

The nature of the risk or threat posed by ‘cyberfraud’ - fraud with a cyber dimension – is examined empirically based on data reported by the public and business to Action Fraud. These are used to examine the implications for a more effective risk-based response, both by category of fraud and also responding to cyberfraud generally, not just in the UK. A key characteristics of cyberfraud is that it can be globalised, unless there are major national differences in attractiveness of targets or in the organisation of control. This does not mean that all cyberfraud is international, however: not only do some involve face to face interactions at some stage of the crime cycle, but in online auction selling frauds, it appears to be common for the perpetrators and victims to reside in the same country. After reviewing patterns and costs of victimisation and their implications for control, the paper concludes that any law enforcement response must begin by being strategic: which other public and private sector bodies should be involved to do what; what should be the specific roles and responsibilities of the police and where ‘problem ownership’ should lie; what are we willing to pay for (in money and effort) for greater cybersecurity and how to reduce ‘market failure’ in its supply; and, how that security is going to be organised for and/or by the huge numbers of businesses and people that are (potentially) affected.     

Pecunia non olet: Cleansing the money-launderers from the Temple

This article analyses the development of police-bank relationships, principally in the UK but also elsewhere, within the context of the control of money laundering. It argues that we have moved from a situation of national control over bank secrecy to an emerging New International Order in which most, though not all, countries are pressurised into taking greater measures to reduce bank secrecy where crime is suspected. In Europe, particularly, banks are being turned into an arm of the state by being required to keep detailed records and to inform police where they suspect — or even where they ought to suspect — that moneys banked are the proceeds of crime. The article concludes with discussion of the limitations on this process generated by political economy factors.     

Trends in Police-recorded Offences

This article presents 10-year trends (1998–2007) on some common crimes: homicide, assault, rape, robbery, car theft, domestic burglary and drug offences. In addition, a few less common offences in police statistics, such as money laundering, corruption, offences against computer data and systems are discussed, even though trends of these crimes are not available. Trends are shown from Western, Central and Eastern Europe, where significant sociopolitical changes have occurred. Although police data actually describes more the recording practices of the officials than the amount of crime, police data is highly valuable for research purposes. Most countries continuously collect information about police activity, and the police is mostly the starting point for proceeding with a case in the criminal justice system. In the USA, all common offences recorded by the police have decreased during the recent years. In Europe, property crimes, homicide and robbery have decreased in most countries, but violence and drug crimes have increased. According to the crime victim surveys, the increase in assault cannot be explained by the increasing reporting activity of victims; the increase seems real. The level of crime differs considerably in different areas: for instance, homicide is most common in Eastern Europe, but assault is much higher in Western Europe.     

School Resource Officers and the School to Prison Pipeline: Discovering Trends of Expulsions in Public Schools

Public school systems in America have come under scrutiny due to the harsh treatment of students by School Resource Officers (SROs). Incidents of armed, uniformed police in schools affecting physical arrests in American classrooms seem to be ever more frequent in news cycles, likely due to the ease of capturing these events on video via cell phones of bystanders. Of particular note, visceral reports of “heavy-handed” SROs reinforce a consistent narrative from some media outlets suggesting that the simple presence of these officers inside schools leads to student arrests for behaviors that can arguably be dealt with by the school administration in a reintegrative manner. The apparent lack of school discretion and the presence of strict zero tolerance policies are at the root of an issue that has been termed the “School to Prison Pipeline” by mass media. SROs are often the exclusive focus of this issue, typically as a symbol of a school’s dedication to strict enforcement of rigid rules.     

The tussle with trust: Trust in the news media ecology

This article offers a conceptual exploration of the changing notion of trust and distrust in today's news media ecology. Central is the question whether the relationship between the traditional media actors, media organisations, journalists and news users, can be increasingly characterised by distrust. Do we really notice a decline in trust in the news media? And moreover, are these feelings of distrust grounded? In order to answer these questions, we look at the changing economic, technological and societal context and how this might explain the strained relationship between these actors. We find that to a large extent the goals of the media actors diverge or even conflict. Mutually bridging these goals is difficult as they boil down to ideological and normative choices. This requires us to reconsider our ways of looking at trust. Therefore, this article's central argument is that a trusted relationship between the media actors is unlikely to result from a definitive settlement between the actor's conflicting goals. Rather, maintaining a trusted relationship is likely to become a matter of constant renegotiation. For this renegotiation to succeed, transparency and integrity are key. We find inspiration in the recent work of Solove (2001), Nissenbaum (2004) and Mansell (2008, forthcoming) to take a different, more contextual approach towards the notion of trust. As regards the relationship between news organisations and users, we suggest these norms should be negotiated in a balanced and transparent way, giving users an equal say in the process. The relationship between journalists and news users should be guided by a mutual interest in truth telling, whereby users are not only merely seen as consumers, but also as potential contributors to news stories. Policy makers in turn should act as facilitators of such spaces of renegotiation.     

Prevention,Crime Control or Cash? Public Preferences Towards Criminal Justice Spending Priorities

We propose and test a new methodology to assess the public’s criminal justice spending priorities. Respondents are asked to trade‐off alternative crime prevention and control policies as well as a potential tax rebate. In a nationally representative sample, we found overwhelming support for increased spending on youth prevention, drug treatment for nonviolent offenders, and police. However, the median respondent would not allocate any new money to building more prisons and would not request a tax rebate if the money were spent on youth prevention, drug treatment, or police. At the margin, we estimate the public would receive $3.07 in perceived value by spending $1.00 on youth prevention; $1.86 in value for every dollar spent on drug treatment; and $1.76 for a dollar spent on police. However, the public would not spend more on prisons, deriving only 71 cents in value for every tax dollar spent.