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Money Laundering

by msecadm4921

To paraphrase Bertolt Brecht: ?If you want to steal, buy a bank.”

To paraphrase Bertolt Brecht: ?If you want to steal, buy a bank.” How true this opening to chapter one is of DIRTY DEALING by Peter Lilley. Published December 2000 by Kogan Page, 120 Pentonville Road, London. N1 9JN. Hardback, 223 pages. ISBN 0 7494 31431. Price œ16.99.. In the 1970s, the Italian Mafia did just that, setting up two banks in London?s West End, one in the Haymarket and another within 400 yards, both with elegant entrances ready for the unsuspecting investor, who in turn on occasions had illegal monies to invest, tax avoidance and from other crime. (Isn?t tax evasion a crime?) The activities of these two banks led me to spend much time in Italy investigating the transfer of funds between various major banks in Rome, Milan and Turin. The investigation was carried out with Italian judges. Thus, I have for many years been concerned at the laundering of money, in particular from the evil trade of drugs. It was therefore with exceptional interest I read this exceptional book, Dirty Money.

The author, Peter Lilley, has been involved internationally in the prevention, detection and investigation of global fraud and money laundering for 17 years. He is a Fellow of the Chartered Institute of Banking, a Certified Fraud Examiner and a member of the Institute of Professional Investigators. He runs Proximal Consulting. The author tells the truth about global money laundering. He is to be commended for the way he has brought this serious growing problem to the attention of the government and the public. If this situation remains unchecked, it will destabilize countries and economies and provide power to the unscrupulous. Peter Lilley describes money laundering as the cleaning of dirty money generated by criminal activity. He argues that terrorist groups need to launder funds and that such groups are active in widespread activity, predominantly drug running. Such claims have been made about ETA, the IRA and others. Peter Lilley provides frightening statements that should wake up governments such as: ?The rise of organised crime is now an accepted, if regrettable fact of global life.? And the ?illicit drugs industry is worth $400 billion a year. Lilley also refers to the dreadful dealing in women and children for prostitution and that the UN estimates that more than 500,000 women and girls are entrapped in this modern version of the sex trade each year. Another criminal act referred to is the trade in illegal arms. In the final pages of chapter one are brief details of the ?International Groupings of Organised Criminals?.

Chapter two refers to ?Globalisation opening many opportunities for crime and according to UN Human development Report 1999 estimated to gross $1.5 trillion per annum. ($1,500,000,000, 000.) That is 17 per cent of US GDP! Again, figures obtained by the author reveal the true extent of illegal drug trafficking ? generating $57.3billion annually in the US – and these are 1997 figures. Referring to research figures, some 90 per cent of all banknotes circulating in the US are contaminated by narcotics and in London 99 per cent tainted with cocaine with one in 20 exhibiting high levels of the drug, suggesting the handling by dealers or actually being used to snort the drug. This chapter continues to provide figures that should worry many governments. One could go on providing figures that ?SHOCK?. The author also refers to the ?facilitators? free movement across borders? with the removal of exchange and currency controls. Chapter three provides ten money-laundering measures such as: governments must criminalise money laundering. The author discusses how proceeds of crime get into the banking system. Also, how countries or financial institutions offer true anonymous banking where owners of the funds do not have to identify themselves or prove their identity by the production of illegal documents. Chapter four examines merchandise laundering, where cash is used to purchase goods that can then be sold, thus effectively avoiding the banking system until the money to be deposited is totally clean, as it can be shown that it is derived from a legitimate transaction. The purchase of girls for prostitution and the launder of the proceeds from this terrible trade in human flesh are also discussed. The author discusses ?businesses? that are ideal for laundering cash, including business areas that have not traditionally been used for money laundering but are now are dealt with as ?lost in the wash?. Lilley argues that unless the criminal owns the bank, or the bank is in a country that is unsophisticated or where money controls are lax, then the last place that dirty money will be taken to on the first stage of its washing process is a bank. Chapter five deals with the complete anonymity in off-shore banking, also known as Off Shore Financial centres (OFCs.) Haven?t we heard of customers of these centres giving money to political parties?) The author goes into some detail on these ?tax havens? He argues that the focus of the worlds money laundering regulatory agencies and bodies is now firmly fixed on offshore financial centres. Is it logical that they cross the final frontier, and move into space?
Act now
Chapter six is titled ?Washed in Space: Cyber Laundering in the 21st Century?. The author argues that organised criminal groups are now making the best possible use of advanced technology and cyberspace. Using the cutting edge technology to evade and frustrate official investigations. Generating income by cyber crime attacks. Other examples are given. Lilley states: ?The potential for criminals to actually commit crime using technology has no boundaries? and ?everything that the money launderer needs is now available on-line?. In chapter seven Lilley argues that the battle against dirty dealing is not being successfully waged. He gives many worrying examples including of a bank convicted of laundering drugs money by the million in the US and still operating as a legitimate bank in Europe. He refers to Russian and other organised criminal syndicates. Lilley argues that it is known which banks in Luxemburg have never made a suspicious report to the authorities. Preventative strategies for business are discussed in chapter eight. Know your customer and train banking staff, Lilley stresses, and keep records so that it can be shown that you acted in a legitimate fashion. This is followed by chapter nine: ?The Final Spin?. Lilley argues that the US Government is the only country that realises the magnitude, extent and threat of the problem. (What have I been stating in Professional Security for many years?) In the final paragraph the author stresses that key elements should be implemented immediately: ?Ensuring there are tough anti-money laundering laws exist, encouragement of international co-operation, improve the standards and extent of financial intelligence.? Governments should note his final words: ?This is a severe problem-a business and financial apocalypse-that now merits such draconian action.? If, as I fear, this will not occur then the future looks very grim indeed. Very useful appendices. Readership would be risk Managers, security staff in financial Institutions and the police; security managers in the art world, precious metal market, jewellery, automobiles, boats and so on; also those responsible for IT systems. Any other commercial activity that due to the nature of its operations can be used for money laundering.

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