Tracing criminal proceeds through fungible mixtures in money laundering cases

2020 ◽  
Vol 23 (4) ◽  
pp. 783-792
Author(s):  
Kenny Foo
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Criminal Proceedings ◽  
Content Type ◽  
Specific Focus ◽  
Civil Proceedings ◽  
Disclosure Obligations

Purpose The purpose of this paper is to examine the problem of tracing criminal proceeds through fungible mixtures, in the context of money laundering prosecutions and with a specific focus on whether clean withdrawals can be made from tainted mixtures. Design/methodology/approach The question of withdrawing clean funds from a tainted mixture is framed as a problem of proof rather than a problem of impossibility. The tracing rules are then engaged to overcome evidential difficulties, but the rules are shown to operate very differently in civil proceedings and criminal proceedings. The proper application of the tracing rules in criminal proceedings is then illustrated using the facts of William v R [2013] EWCA Crim 1262. Findings Because evidential uncertainties must be resolved in favour of the accused person in criminal proceedings, the tracing rules – properly applied – limit the range of situations in which the Prosecution can successfully trace criminal proceeds through fungible mixtures. Originality/value This paper may be useful to law enforcement, those involved in prosecuting or defending money laundering cases and regulated persons assessing their money laundering risks and disclosure obligations.

scholarly journals Anti-money laundering and counter-terrorist financing threats posed by mobile money

2019 ◽  
Vol 22 (1) ◽  
pp. 158-172 ◽  
Author(s):  
James Whisker ◽  
Mark Eshwar Lokanan
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Global Awareness ◽  
Content Type ◽  
Mobile Money ◽  
Terrorist Financing ◽  
Factors Associated ◽  
Three Stages ◽  
Practical Implications

Purpose The purpose of this paper is to explore the various characteristics of mobile money transactions and the threats they present to anti-money laundering (AML) and counter terrorist financing regimes. Design/methodology/approach A thorough literature review was conducted on mobile money transactions and the associated money-laundering and terrorist financing threats. Four key themes were identified in relations to the three stages of money laundering and effective law enforcement. Findings The findings indicate that as money laundering and terrorist financing transactions continue to gravitate towards the weaknesses in the financial system, mobile money provides yet another avenue for criminals to exploit. Risk factors associated with anonymity, elusiveness, rapidity and lack of oversights were all integral considerations in building an effective AML regime. The use of cash is considered a higher threat than mobile money prior to implementation of systems and controls. Practical implications This rapidly changing environment of how individuals manage their money during transactions is set to further explode globally, which poses new problems for regulators and governments alike. Unless there is a unified concentration to heighten global awareness, the imposing threat of mobile money is set to increase at a rapid rate if appropriate actions are not taken. Originality/value The findings from this study can be used to gain greater insights on mobile money transactions and raise further awareness of the ever-increasing threat to global financial integrity.

Mapping the contours and limits of “irresistible inference”

2020 ◽  
Vol 23 (4) ◽  
pp. 735-743
Author(s):  
Kenny Foo
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
English Court ◽  
Content Type ◽  
Tools And Techniques ◽  
Court Of Appeal ◽  
Disclosure Obligations

Purpose In R v Anwoir [2008] EWCA Crim 1354, the English Court of Appeal held that, in money laundering prosecutions, the criminal provenance of property can be proved by showing that the circumstances in which the property was handled give rise to the irresistible inference that it can only have been derived from crime. The purpose of this paper is to analyse subsequent developments that have revealed the contours, and some of the limits, of proof by “irresistible inference”. Design/methodology/approach This paper reviews the reported cases in which an “irresistible inference” was drawn and identifies the features common to most of them. It then explores the limits of proof by “irresistible inference” by reference to the continuing relevance of predicate offences and the use of money laundering tools and techniques for non-laundering purposes. Findings Most of the cases in which an “irresistible inference” was drawn fall within a narrow compass of five categories. The breadth of the principle is constrained by the characteristics of the predicate offence, and its usefulness is limited in cases where the typologies of the predicate offence and the money laundering offence overlap significantly. Originality/value This paper may be useful to those involved in prosecuting or defending money laundering cases, as well as regulated persons assessing their money laundering risks and disclosure obligations.

Follow the money to achieve success: achievable or aspirational

2017 ◽  
Vol 24 (3) ◽  
pp. 425-436 ◽  
Author(s):  
Nicholas Alan McTaggart
Keyword(s):  
Law Enforcement ◽  
Literature Review ◽  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Organised Crime ◽  
Economic Crime ◽  
Content Type ◽  
Terrorist Financing ◽  
The Subject

Purpose The purpose of this paper is to highlight the extent to which organised crime and the environment have altered in relation to money laundering and terrorist financing and to explore whether strategies to “follow the money” have been successful. Design/methodology/approach This paper is based on personal analysis and involvement as a practitioner in law enforcement and includes a broad literature review on the subject of terrorist financing and money laundering. Findings Money laundering, terrorist financing and economic crime activity are being disguised in the “noise” of business by specialists that have become very adept at their craft. Financial institutions and lawmakers have invested heavily in countering money laundering and terrorist financing. However, its real effectiveness is somewhat doubtful. Originality/value This paper serves to stimulate further discussion and research on how all actors can increase collaboration and co-operation to increase the effectiveness of disruption strategies associated with these classes of crime.

Money laundering via cryptocurrencies – potential solutions from Liechtenstein

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Financial Crime ◽  
The Novel ◽  
Content Type ◽  
International Attention ◽  
Compliance Officers ◽  
Practical Implications ◽  
Potential Remedy

Purpose The purpose of this paper is to demonstrate how cryptocurrencies are used to launder money and how solutions from Liechtenstein’s novel blockchain legislation could be used to tackle the issue. Design/methodology/approach Within the scope of the literature review, the characteristics of cryptocurrencies and how these characteristics facilitate money laundering are discussed. To investigate concrete methods that money launderers use, a qualitative study with 10 presumed money launderers and 18 prevention experts was conducted. The results were subsequently tested quantitatively. Thereafter, the novel Liechtenstein blockchain act is discussed and it is detailed how the legislation could contribute to the establishment of an international standard in blockchain regulation. Findings Money launderers continue to abuse cryptocurrencies such as Bitcoin as vehicles for financial crime. The Liechtenstein Blockchain Act could serve as a benchmark for regulators around the world aiming to solve the issue. Research limitations/implications Current anti-money laundering regulations are rather ineffective when it comes to cryptocurrencies. Practical implications The findings of this paper illustrate that new and innovative means for combating money laundering are needed. In particular, this paper provides insights into cryptocurrency crime and Liechtenstein’s response for legislators, law enforcement, compliance officers and regulatory authorities. Originality/value Liechtenstein’s blockchain act, as a potential remedy to money laundering, has thus far not received international attention.

The agency dilemma in anti-money laundering regulation

2020 ◽  
Vol 23 (1) ◽  
pp. 26-37
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Risk Assessment ◽  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Banking Sector ◽  
Theoretical Framework ◽  
Content Type ◽  
Practical Implications

Purpose The purpose of this paper is to provide a comprehensive theoretical framework that can be applied to the application of anti-money laundering (AML) regulation within the banking sector. Design/methodology/approach The paper is linked to a PhD study to be published in Winter 2015/Spring 2016 that looks at trade-based money laundering and risk assessment using an agent–principal relationship to explain the underlying relationships affected by regulation in a ML context. Findings The paper finds that imposing regulation and assuming that the banking sector is simply an arm of law enforcement is not an effective approach and could actually contribute toward developing ML schemes that are too complex to be easily detected. Practical implications The paper has implications for the banking, regulatory and law enforcement areas involved in ML and its detection. Originality/value The paper offers originality in providing a comprehensive multi-agency framework that is cognisant of all factors affected by AML regulation. It extends beyond existing work that has offered agency insights into various sectors of AML and ML partners.

In the shadow of the dark twin – proving criminality in money laundering cases

2016 ◽  
Vol 19 (4) ◽  
pp. 447-458 ◽  
Author(s):  
Kenneth Murray
Keyword(s):  
Law Enforcement ◽  
Supreme Court ◽  
Money Laundering ◽  
Design Methodology ◽  
Content Type ◽  
Fit For Purpose ◽  
Proceeds Of Crime ◽  
Uk Supreme Court ◽  
The Uk ◽  
Practical Implications

Purpose This paper aims to highlight the persistent influence of the concept of “predicate offence” in respect of how the crime of money laundering is conceived and discussed, and to discuss how this inhibits the ability to prosecute the crime even where, as is the case in the UK, “predicate offence” is not a requirement of the relevant legislation. Design/methodology/approach Discussion of a recent UK Supreme Court judgment, R v GH, in particular, how the import of it appears to contrast with perceptions offered by the experience of two recent money laundering convictions on Scotland, where no evidence was led on establishing the money was criminal before the criminal act was libelled as money laundering. Design of modern money laundering schemes are illustrated and assessed in terms of how they can be prosecuted in the context of prevailing interpretations of the law. Findings The effectiveness of the UK money laundering offences as set out in the Proceeds of Crime Act of 2002 requires revaluation. Clarification is required in respect of how criminality in such cases can be proved. Consideration should be given to introducing new legislation targeted at the transmission of money or value under the cover of false documentation. Research limitations/implications Clarification is required on how the concept of “irresistible inference” as established by R v Anwoir can be applied to money laundering cases in light of the R v GH judgement of the UK Supreme Court. Practical implications Upgrade of law enforcement knowledge base and investigation skills is required to prosecute existing money laundering offences more effectively, but the lack of clarity as to what will suffice as proof of criminality serves to inhibit the investigation of these crimes as well as their prosecution. Social implications Protection of democracies, democratic institutions and the communities they serve from the corrupting influence of laundered criminal money through more effective prosecution of money laundering offences. Originality/value To encourage discussion on whether the relevant legislation remains fit for purpose and what practical measures can be taken to improve it.

Money laundering with cryptocurrency: open doors and the regulatory dialectic

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Daniel Dupuis ◽  
Kimberly Gleason
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Financial Information ◽  
Asset Markets ◽  
Content Type ◽  
Continuous Innovation ◽  
Illicit Use ◽  
Privacy And Anonymity ◽  
Broad Overview

Purpose The purpose of this study is to describe the opportunities and limitations of cryptocurrencies as a tool for money laundering through six currently available “open doors” (exchange mechanisms). The authors link the regulatory dialectic paradigm to know your customer and anti-money laundering evasion techniques, highlight six tactics to launder funds with virtual assets and investigate potential law enforcement and regulatory alternates used to reduce the incidence of money laundering with digital coins. Design/methodology/approach The methodology used is the analysis of significant recent events and the availability of “fintech” crime-fighting tools and a literature review focusing on the application of the regulatory dialectic to innovations in existing crypto-asset markets that make them compelling to money launderers. Findings The authors examine the illicit use of cryptocurrency through Kane’s regulatory dialectic paradigm, identify a number of avenues for crypto to fiat exchange that are still available for those seeking to launder money using digital coins, review recently “closed doors” and make recommendations regarding the regulation of crypto-related markets that may assist in making them less desirable for potential criminals. Research limitations/implications The research is constrained by the state of the market for crypto to fiat exchange as of time of writing; the technology and products to launder money using these open doors is continually changing (as predicted by the regulatory dialectic). Social implications The regulatory dialectic predicts that regulatory response is reactive and often increasingly burdensome or oppressive. There is continuous innovation in the cryptocurrency market, which seeks to preserve privacy and anonymity with which regulators seek to keep up. From a social perspective, the response of bank regulators worldwide to existing open doors for crypto to fiat exchange used for money laundering may prove costly to individuals engaging in legitimate transactions, as well as financial criminals and may also erode the ability of individuals to maintain privacy regarding their financial information. Originality/value To the authors’ knowledge, there are yet no broad overview regarding the feasibility of money laundering across crypto-related assets within the paradigm of the regulatory dialectic.

scholarly journals Money laundering and civil forfeiture regime: Malaysian experience

2016 ◽  
Vol 19 (4) ◽  
pp. 337-345
Author(s):  
Anusha Aurasu ◽  
Aspalella A. Rahman
Keyword(s):  
Developing Countries ◽  
Law Enforcement ◽  
Money Laundering ◽  
Design Methodology ◽  
Complex Issue ◽  
Content Type ◽  
Standard Of Proof ◽  
Relevant Case ◽  
Terrorism Financing ◽  
The Individual

Purpose Money laundering is a complex issue which has been ongoing for many years globally. Developed and developing countries form anti-money laundering regime in the view to combat these ever-challenging criminal activities. Laundering of money involves the hiding and cleaning of “dirty money” derived from unlawful activities. Malaysia has come up with its own regime of anti-money laundering. Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA) provides power to forfeit proceeds at the end of proceedings. This paper aims to investigate whether the current civil forfeiture regime in Malaysia is effective in fighting against money laundering. Design/methodology/approach This paper will be based on a doctrinal research where reliance will mainly be on relevant case laws and legislations. AMLATFA is the primary legislation which will be utilised for the purpose of analysis. Findings Despite the enactment of AMLATFA, little study has been carried out on the effectiveness of civil forfeiture regime under Malaysian anti-money laundering laws. Furthering into forfeiture of criminal proceeds, the findings show that forfeiture provisions are the recent law enforcement strategy to fight against crimes. It is implicit that this strategy is more efficient than the conventional approach, which only focused on punishing the individual criminal but failed to diminish the criminal operations as a whole. Originality/value Strengths and weaknesses of AMLATFA are identified where it is less comprehensive in terms of offences covered and standard of proof. With that, this paper analyses the civil forfeiture regime under the Malaysian anti-money laundering laws. This paper would also offer some guiding principles for academics, banks, their legal advisers, practitioners and policymakers, not only in Malaysia but also elsewhere. Anti-money laundering laws can further be improved by being a better and established civil forfeiture regime where Malaysia will be able to discharge its duties well on forfeiting benefits from criminals.

Money laundering through raw diamonds

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Three Stages ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose This paper aims to illustrate how illegally obtained funds are laundered through raw diamonds in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach To identify specific money laundering techniques involving raw diamonds, this study used a qualitative content analysis of data collected from 60 semi-standardized interviews with both criminals and prevention experts and a quantitative survey of 200 compliance officers. Findings Raw diamonds are extraordinarily suitable for money laundering in European German-speaking countries. In particular, they may be used in all three stages of the laundering process, namely, placement, layering and integration. Research limitations/implications Because the qualitative findings are based on semi-standardized interviews, their insights are limited to the perspectives of the 60 interviewees. Practical implications Identifying gaps in existing anti-money laundering mechanisms should provide compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value While prior studies focus on the methods used by organizations to combat money laundering and how to improve anti-money laundering measures, this paper investigates how money launderers operate to avoid detection, thereby illustrating authentic experiences. Its findings provide valuable insights into the minds of money launderers and combines criminal perspective with that of prevention experts.

FINRA’s disciplinary actions in 2017: increased restitution ordered with minimal changes in number of cases

2018 ◽  
Vol 19 (2) ◽  
pp. 19-23
Author(s):  
Brian Rubin ◽  
Adam Pollet
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Disciplinary Actions ◽  
Financial Industry ◽  
Electronic Communications ◽  
Content Type ◽  
The Past ◽  
Expert Analysis ◽  
Research Analysts ◽  
Practical Implications

Purpose The purpose of this paper is to analyze the Financial Industry Regulatory Authority’s (FINRA) 2017 disciplinary actions, the issues that resulted in the most significant fines and restitution and the emerging enforcement trends from 2017 and beyond. Design/methodology/approach The approach of this paper discusses the disciplinary actions in 2017 and prior years, details the top 2017 enforcement issues measured by total fines assessed, including anti-money laundering, trade reporting, electronic communications, books and records, research analysts and research reports, and explains current enforcement trends, including restitution, suitability cases and technological issues. Findings In 2017, restitution more than doubled from the prior year, resulting in the fourth highest total sanctions (fines combined with restitution and disgorgement) assessed by FINRA over the past 10 years. Practical implications Firms and their representatives should heed the trends in both the substantial restitution FINRA is ordering and the related enforcement issues in the cases FINRA has brought. Originality/value This paper provides expert analysis and guidance from experienced securities enforcement lawyers.

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