Anmari Sablan

CJ104
Essay: Money Laundering
Andrew Quitigua

Money laundering is the illegal process of concealing the origins of money obtained

illegally by passing it through a complex sequence of banking transfers or commercial

transactions. The overall scheme of this process returns the "clean" money to the launderer in

an obscure and indirect way. Money is being laundered illegally to earn income, hide its

source, or change its shape. Because it is not possible to use the revenues obtained from

illegal ways freely. In the event that it is determined that income is obtained through illegal

means, those who earn such income will be sentenced to imprisonment and fines on the one

hand. On the other hand, they will be deprived of these revenues. Therefore, criminal

organizations aim to increase their criminal activities by laundering illegal money.

Various institutions and methods are used for money laundering. Some of these are

described below with examples.

 Smurfing:

It is a method of preventing the reporting of the said transactions to the authorized

institutions within the scope of providing continuous information or identification by making

transactions under the legal limits brought by the countries regarding the obligation to

provide continuous information and identification.

 Opening an account with a fictitious or wrong name:

In order not to attract attention and to prevent control, the transaction is carried out

entirely by the name of the fictive or someone else.

 Partnering in crime with financial institutions:

 With this type of transaction, in order to overcome the reporting obligation, it is

ensured that the notification is not made by agreeing with the management or employee of

the institution where the money is deposited above the notification amount.

A case study determined on the subject is as follows; illegal earnings were taken to

the intermediary institution with the cooperation of personnel working in intermediary

institutions, and checks issued by the intermediary institution were received in return. These

checks were deposited in the customer account opened by the brokerage house with fake

names, and the funds in this account were used to buy bearer bonds and deposit certificates.

Then, when the maturity date came, the coupon prices and interest rates of the bond were

taken, and deposit certificates were sold to be transferred to the bank account.

 Benefiting from various companies:

In this method;

- Nonfunctional companies are used.

- Companies operating legally are used.

- Shell corporations are used.

 Money laundering with workers:

It is a method used by money launderers with the idea that the remittance process of

the workers working in developed countries to their relatives in their country will not attract

attention.

 Partnering in crime with foreign financial institutions:

It is a method of cooperation with cross-border centers and other foreign financial

institutions.
  Exchange offices:

It is the receipt of illegal income in cash by foreign exchange offices and placement

into the financial system.

 Cash smuggling:

In this method; The cash obtained from illegal activities is taken to countries where

there are not a lot of obligations either by the persons serving as money courier or by any

means. Later on, this cash is taken into the financial system in these countries. As a result of

these transactions, these funds, which are provided with legal images, can be sent directly to

the country they were first acquired, or they can be sent in different countries and used

without risk.

 Prize money from chance games:

In this method; The winner of the jackpot is found by the launderers before he gets his

jackpot, and he is given more money than the jackpot he has won. Then the grand prize is

taken by the money launderer.

 Casinos or etc. businesses:

In this method, the launderers' cash is used to buy chips from casinos, but no

gambling is played or played very little, and the chips are replaced with checks taken from

the casino. The checks in question are then deposited in a bank, the check prices are

transferred from here to another country or used for the purchase of the real estate.

On the other hand, money can be transferred directly to the casino, and in return, the

money remaining after the commission can be converted into checks that are issued as

gambling winnings. In both cases; Questions asked by money holders about the source of this

money are answered as gambling winnings.

 Money laundering is a serious threat. It has devastating consequences for the financial

system and for national security, since it provides funds for terrorists, drug traffickers, arms

dealers, and criminal groups. Criminals can rely on dirty money to capitalize their legal

entities with criminal proceeds, which distorts competition between legal and illegal

enterprises. Despite efforts to implement measures to combat money laundering, the

international community and individual countries are continually confronted by new trends in

money-laundering activities that may make such measures outdated and ineffective.

It is clear that legislation by itself is by no means enough to effectively combat money

laundering. A comprehensive and integrated strategy is required. One of the main goals is to

make crime less profitable by confiscating criminal proceeds. Moreover, international

assistance is essential for the fight against money-laundering operations undertaken at the

transnational level. Bilateral agreements tailored to specific circumstances are the most-

effective means to accelerate investigative and judicial processes and overcome difficulties

and delays.