The Threat of Money Laundering

Money laundering remains a key part of most financial corruption.  If the money changing hands is easily tracked, it’s usually not that difficult to determine when improper behavior is at play.  Once investigators lose the ability to follow the money, they lose the ability to talk to everyone involved in the chain of illegal activity.
 


 

Of course, that’s not to say that improper behavior involving money laundering can’t be cracked.  Just in the past week, former New York legislator Sheldon Silver and alleged Medicare scam artist Jorge Morales have both been in the news due to corruption charges that involved money laundering.  And it’s not only US investigators that have become more sophisticated at cracking money laundering investigations – Brazilian President Michel Temer and former Mexican Governor Javier Duarte have also had plenty of money laundering-related headlines this week, too.  But money laundering makes investigators’ lives that much harder, and investigations take that much longer.

The good news is that the United States is doing better than most other countries on combating money laundering.  The Financial Action Task Force (FATF), the international body charged with making money laundering more difficult through regulation and documentation requirements, released their report on the US money laundering financial framework, and found that the banking industry as a whole is well equipped to prevent money laundering.  The US also does well on the judicial front, prosecuting more than 1,200 cases a year, resulting in more than $4 billion per year in confiscated money.

But there is one weakness.  As of March, the FATF ranks non-bank investments as particularly susceptible to money laundering.  Examples of businesses serving these areas include real estate, casinos, precious metals, and even service providers such as lawyers or tax accountants.  These industries are considered to be “non-compliant” with the recommendations of the FATF, with major shortcomings in money laundering protections as a result.

Until these industries are better regulated and face stricter reporting guidelines, there will be cracks in the money laundering regulations of the United States – making criminals’ lives easier and investigators’ jobs harder.  If there’s a crack in the protection against money laundering, they’ll find it.  And the odds are good that investigators will be right behind them, trying their best to put the pieces together.

To learn how CMTS can help your investigative agency close more cases, call us at 919.600.5102 or email us at Team_CMTS@WingSwept.com.

Tags: