By

Akash Jindal
 Money laundering can be described as the
process by which a person conceals or
disguises the identity or the origin of illegally
obtained proceeds so that they appear to
have originated from legitimate sources.
 The financing of terrorism can be described
as the process by which a person tries to
collect or provide funds with the intention
that they should be used to carry out a
terrorist act by a terrorist or a terrorist
organization
 exploit economic and financial globalization
 have serious social consequences
 provide drug traffickers
 grow organized criminal groups
 grow arms dealers and other criminals
 strike at the integrity of a country's financial
institutions.
 It distorts the operation of markets
transactions
Tax
Integration
Placement
Layering
Heavens
Flight Capital
 Placement
Getting Currency into the
financial system so as to
convert illicit funds from cash
straight into a financial
instrument or bank account
Layering
The movement of funds from
institution to institution to hide
the source and ownership of
the funds, obscure the audit
trail and sever the link with the
original crime

Integration
The reinvestment of those
funds in an ostensibly
legitimate business so that no
suspicion of its origins remains
and to give the appearance of
legitimizing the proceeds
 Placement Layering Integration
• Smurfing
• Tax Havens & • Use of haven bank
• Shipping Money Offshore Banks credit cards
Abroad • Receiving as
• Bank Secrecy Law as
• Placement through a layering tool consulting or
directors fee
Banks
• Corporations & Shell • Arrangement of
• Use of “Pass Companies as a corporate loans
Through” or layering tool
• Proceeds of
“Payable Through”
• Use of trusts gambling
Accounts
• Use of walking • Real estate
• Electronic Wire transactions
accounts
Transfers • Stock Purchase
• Establishing self
• Insurance Products • Use of business
owned bank
• Investment Related • International
• Use of intermediaries
Transactions importing and
exporting
•
 Acceptance of flight capital by western countries
 Laws and limitations of other countries

 Jurisdictional conflicts and lack of international

coordination
 Tax heavens as sanctuaries
 Offshore corporations
 Having to prove fraudulent transfer
 Bankings’ role in facilitation of the activity
 Bank Secrecy
 Volume and complexity of international transfers of
funds
 Internet based banking
 Shortfall of reporting requirements
 Criminals influencing Government and Bank
support
 The widespread use and acceptance of trade mis-
pricing
 Bulk e-mail Inventions / Patents

Multi Level Marketing Vanity Press Publishing

Vending Machines Franchises

 Bank Fraud Business Loans Internet Services

Cheque Fraud Counterfeiting Cramming

Fake Ads & Directories Fraudulent Orders Supply Scams

 A money launder's objective in laundering ill is
to : Get it out; cover it up; bring it back
Contribution by different continents in ML(IMF report
data, year 2008)
Contribution by financial sector in ML (IMF report data, year 2008)
 'money transfer without money movement‘

 was developed in India

 Also known as chop, chit , flying money and

underground bank
• Inspector Raj
• Dual Responsibility
• Undue Delay in Processes
• Excessive intervention by Judiciary
• Very less time in law making
• Considering of problem rather than cause of the
problem
• More interest before investigation but no interest in
concluding the cases
• Understand the need for creation / modification of laws to curb /
eliminate opportunities for scams / frauds based on the study
of global scenario
• Ensure appropriate powers to law enforcement agencies
• Provide facility for 2/3 levels of appeal before any one approach
the judiciary
• Ensure time bound completion for the cases / designating case
officer
• Announce very severe punishment for committing the crime
• Introduction of Compulsory Operations Audit on a periodical
basis
 Utilize services of professionals such as
Chartered Accountants, Advocates &
Company Secretaries for conducting pre-
enquiries with regard to various indicators
available from news media

 Be independent from every business not only

on paper but otherwise