Remain vigilant on money laundering money laundering london

When the office of thrift supervision proposed regulations requiring savings associations to develop and maintain know your customer programs, the intent was to reduce the likelihood that savings associations will become unwitting participants in illicit activities, such as money laundering. The regulations would have required banks and savings associations to determine the true identities and legitimate activities of their customers. After much public comment opposing the regulations as burdensome and intrusive, the OTS has decided not to go forward with implementation. But the fact that it even proposed them – and that the other regulatory agencies (though not the NCUA) are drafting similar rules – is an indication that money laundering is becoming an ever-increasing threat.

It is virtually impossible to determine exactly how much ill-gotten money is laundered each year, but according to the federal bureau of investigation, it could be as much as $500 billion.Money laundering london for the sake of perspective, the top three companies on the fortune 500 list, general motors, wal-mart, and ford produced $445 billion in revenue combined. Of course, they paid taxes; the money launderers didn’t. Generally speaking, credit unions have not been targeted for money laundering purposes. As a matter of course, credit unions have traditionally known their members and their depository habits better than big banks. But times change, and as the internet homogenizes financial services, and crooks are driven from traditional money laundering venues, credit unions and other financial institutions could potentially begin seeing themselves the targets of money laundering schemes. The good news is that the techniques used for money laundering haven’t gotten any more sophisticated, and with a little training, frontline staff can spot the trends crooks use.Money laundering london the following excerpts from the financial action task force report on money laundering outline some of the more common strategies for laundering money, and what frontline staff should look for it detect these strategies. FATF is a 26-nation organization created by the group-of-seven industrial countries to address the global problem of money laundering. While no significant new methods of money laundering have been identified, there continues to be changes in the relative use of the various money laundering methods, and in particular there was a continuing trend for money launderers to move away from the banking to the non-bank financial institution sector. A significant number of countries reported that the technique of smurfing or structuring was commonly used – this technique entails making numerous deposits of small amounts below a reporting threshold, usually to a large number of accounts.Money laundering london the money is then transferred to another account, often in another country. This method was widely used, even in countries that did not have cash transaction reporting requirements, which require reports to be made to the authorities of transactions above certain thresholds. Countries to which these funds were transferred often found the funds being promptly removed as cash from the recipient accounts. In one country, it was found that increased awareness of this technique was causing smurfers to deposit sums of $2,000 to $3,000 into more accounts, so as to avoid detection. There continues to be many instances of the use of accounts held in the name of relatives, associates or other persons operating on behalf of the criminal. Other methods commonly used to hide the beneficial owner of the property include the use of shell companies, almost always incorporated in another jurisdiction, and lawyers.Money laundering london these techniques are often combined with many layers of transactions and the use of multiple accounts – thus making any attempts to follow the audit trail more difficult. The shell corporation is a tool which appears to be widely used in both the banking and non-banking sectors. Often purchased off the shelf from lawyers, accountants or secretarial companies, it remains a convenient vehicle to launder money. It conceals the identity of the beneficial owner of the funds, the company records are often more difficult for law enforcement to access because they are offshore or held by professionals who claim secrecy, and the professionals who run the company act on instructions remotely and anonymously. These companies are used at the placement stage to receive deposits of cash which are then often sent to another country, or at the integration stage to purchase real estate.Money laundering london shell companies have also been the laundering vehicle for bankruptcy fraud. The FBI estimates that as much as 10% of bankruptcy filings involve fraud, including schemes such as the concealment of assets, petition mills, multiple filings, false statements, trustee fraud, attorney fraud, forged filings, embezzlement and credit card fraud. Another technique widely used, particularly by ethnic groups from africa or asia, is the collection account. This payment method is used for legitimate purposes by foreign immigrants and laborers who send money to their home country. However, often the account receives payments from a number of apparently unconnected accounts in the source country. In some countries, organized crime infiltrates smaller banks and non-bank financial institutions, or even seeks to extend this control to a large range of businesses in that area.Money laundering london experts from several member countries uncovered money laundering schemes involving complicit bank directors or employees, and in one member country a noticeable trend was the assistance provided by private banking representatives (bank employees who provide special services to wealthy customers) to smurfs who recycle the bank accounts used for structuring purposes. They typically begin using an account by making deposits and withdrawals heavily. Then a few months before the bank audits those accounts, they stop the activity and leave a few thousand dollars in the account. The account will then show up in the audit as an account that has not had a great deal of activity in the last three months, and is thus less suspicious. Payable through accounts are used by international money launderers. These are demand deposit accounts maintained at financial institutions by foreign banks or corporations.Money laundering london the foreign bank funnels all of the deposits and cheques of its customers (usually individuals or businesses located outside of the country) into one account that the foreign bank holds at the local bank. The foreign customers have signatory authority for the account as sub-account holders and can conduct normal international banking activities. The payable through accounts pose a challenge to know your customer policies and suspicious activity reporting guidelines. It appears that many banks offering these types of accounts have been unable to verify or provide any information on many of the customers using these accounts, which poses significant money laundering threats. Loan back arrangements are also a technique used in a number of countries, often in conjunction with cash smuggling. By this technique, the launderer usually transfers the illegal proceeds to another country, and then deposits the proceeds as a security or guarantee for a bank loan, which is then sent back to the original country.Money laundering london this method not only gives the laundered money the appearance of a genuine loan, but often provides tax advantages. In addition to the techniques outlined above, other familiar laundering techniques continue to figure prominently in the banking sector. Telegraphic transfers remain a primary tool at all stages of the laundering process because of the speed with which the money is transferred, thus making it difficult for law enforcement to trace illegal proceeds, particularly in several jurisdictions. Bank drafts, money orders and cashier’s cheques also remain as common instruments used for laundering purposes. Large cash deposits are still being made in some areas, especially by persons and interests connected to the former soviet union and eastern europe. Often the cash deposit is quickly followed by a telegraphic transfer to another jurisdiction, thus lowering the risk of seizure.Money laundering london finally, electronic funds transfer transactions pose a problem for funds originating in offshore jurisdictions, or are associated with payment through accounts. One FATF member country had done a study which showed that lack of customer identification information on the telegraphic transfer message was a significant problem, and that up to 25% of messages from some jurisdictions did not have the ordering customer information that was needed. It was also noted that although sufficient information was received, the accuracy of some of the information recorded on the transfer message, particularly for funds that were transferred from the former soviet union and eastern european countries, may be questionable.