Nature and Causes of Global Money Laundering

launder money and make illegally profits seem legit and how it is. In this paper we will explain

Organized crime can be narrowed down to five unique areas of criminal activity. The first being racketeering, an umbrella term, meant to describe when any group or groups conduct one or more of the other criminal activities. One of the most successful ways the federal government has been able to hinder the actions of hardcore criminals is through the formation of the RICO Act (Racketeer Influenced and Corrupt Organizations). The second area of major criminal activity is vice, or vice operations. This has to do with victim-less crimes such as drugs, gambling, and prostitution. Again, these crimes are highly problematic because it is the public that decides whether or not they prosper. It’s all too easy to build a case against someone breaking a law by importing huge quantities of controlled substances across a border, but it becomes much more difficult to stem the sale or need for such drugs once they have reached their intended destinations.

According to the U.S. Organized Crime Control Act of 1970: racketeering includes acts of bribery, embezzlement, federal drug offenses,

When dealing with organized crime, those working in the criminal justice field that there are plentiful problems that organized crime brings to the table. One such issues that can rise up are the provision of illicit markets is one large problem associated with organized crime. This is an issues because communities that are in a susceptible state and as a result this types of villages can undoubtedly become dependent on what organized crime can supply (Beare & Naylor, 1994). Within at risk environment manipulation and perversion can

Law enforcement agencies are being incentivized to pursue asset forfeiture because asset forfeiture destroys “the financial infrastructure of the criminal enterprise” (Lyman). Many criminals are motivated by greed and tend to purchase materials, such as weapons, drugs, cars, or real estates. Criminals are purchasing those materials with black money obtained through illicit criminal activities. Asset forfeiture is an effective law enforcement tool to reduce the incentive for illegal behavior (Lyman). Law enforcement use asset forfeiture by removing tools, equipment, cash flow, and profit to keep the criminal organization ability from operating successfully. Asset forfeiture is a process that results in “transfer of the ownership of property

When criminals reach this stage, it becomes arduous for investigators to distinguish if the funds are licit or not ( Grosse, 4 ). One of the most famous money laundering scandals in America was the Bank of New York money laundering scandal with Russia. In the summer of 1999, The Bank of New York found themselves in a predicament when they were found as suspects of an international money laundering scandal. The bank laundered billions of dollars to the Russian mafia and Russian politics. In august later that year, the New York Times published their calculations that the bank laundered nearly $14.2 billion dollars to $10 billion dollars that was laundered from Russia passed through the Bank of New York (Block, 3).

In order to successfully launder money three processes are needed: placement, layering, and integration. In the first state, placement, the illegal proceeding are disengaged from direct association with the crime or criminal. In the second stage, layering, the money is used in some legal financial transaction in order to “camouflage” the cash. In the third stage, integration, the apparently legal money is available to the money launder (Kelly, Maghan and Joseph). For better understanding, the fig 1 gives a real life example on how money laundering is done.

Most people, when they hear the word “crime,” think about street crime or violent crime such as murder, rape, theft, or drugs. However, there is another type of crime that has cost people their life savings, investors’ billions of dollars, and has had significant impacts of multiple lives; it is called white collar crime. The Federal Bureau of Investigation defines white collar crime as

activities including money laundering and fraud of various types. In fact, the FBI has indicated

46. This strategy by and large includes the utilization of genuine organizations with high money turnover, as fronts for lawbreakers to launder the returns of wrongdoing. The sorts of organizations utilized are by and large eateries, bars, correspondence focuses and different sorts of retail shops. The unregulated casual part likewise gives culprits the chance to procure little organizations, for example, second-hand auto dealerships, bars, eateries, gaming houses or land organizations, all of which give secrecy or chances to cover unlawful increases from their criminal birthplace.

In this day and age, a corporation, family, or individual always has a potential risk of encountering fraud within their money supply. On average, fraud and abuse costs U.S. organizations more than $400 billion annually (Federal Bureau Investigation, 2010). Many may think that white collared crime is only money laundering or stealing, but that is only two out of the sum that countless culprits get away with. The term “white-collar crime,” originally coined in 1939 is synonymous with the full range of frauds committed by business and government professionals (Federal Bureau Investigation, 2010). These frauds include anything from bankruptcy fraud, money laundering, identity theft, corporate fraud to a wide number of threats all circling

There are many organized crimes happening in the world. And we should wonder how they earn money to commit those crimes. One of the biggest money source for organized crime is money laundering. Money laundering is disguising the origin of the money and making it look like a wealth traded legitimately. According to UNODC report in 2009, criminal proceeds amounted about USD 1.6 trillion dollar being laundered. To reduce organized crimes, it is important to eliminate money laundering since it is their main source of money.

Areas of financial wealth, such as big corporations, have the ability to become the biggest hot spots for crime. The individuals committing these crimes

Yet, this is a particularly pressing question for white collar crime, as the perpetrators seemingly have so much to lose given their respected positions in society (Schlegel & Weisburd, 1992). Additionally, the vast majority of white collar criminals are financially secure and already have great amounts of monetary resources available to them, making the lure of procuring additional wealth less of a necessity (Schlegel & Weisburd, 1992). Despite this paradox, there are a number of wealthy professionals who choose to engage in white collar financial crimes, as evidence by some of the key figures in the Enron

In the twentieth century, White Collar and Organized Crimes have attracted the attention of the U.S. Criminal Justice System due to the greater cost to society than most normal street crime. Even with the new attention by the Criminal Justice System, both are still pretty unknown to the general public. Although we know it occurs, due to the lack of coverage and information, society does not realize the extent of these crimes or the impact. White Collar and Organized is generally crime committed by someone that is considered respectable and has a high social status. The crimes committed usually consist of fraud, insider trading, bribery, embezzlement, money laundering, identity theft or forgery. One