LEACOM6 Comparative Models of Policing Members: ERNESTO BONTAGEN JR. ALPHREIGH CHANZ CHULIPA JOHNNY DALISDIS KESSLER DE JESUS JOHANS MICHAEL DARIA Group 4 Report: Money Laundering What is Money Laundering? According to the Book “Comparative Models of Policing” by Warren Galas Moyao, PhD, RCrim Money Laundering is the “process” whereby proceeds, reasonably believed to have been derived from criminal activity, are transported, transferred, transformed. converted, or intermingled with legitimate funds, for the purpose of “concealing or disguising” the true source, disposition, movement, or ownership of those proceeds. According to the U.S. Treasury Department Money Laundering is the “process” by which criminals or criminal organizations seek “to disguise” the illicit nature of their proceeds by introducing them into the stream of legitimate commerce and finance. In this “process, large amounts of money” obtained from serious crimes, such as drug trafficking, are made to appear that it originated from a “legitimate source”. According to the Book “Comparative Models of Policing” by Warren Galas Moyao, PhD, RCrim In the U.S. law , it is the practice of engaging in financial transaction to conceal the identity, source, or destination of illegally gained money. In the U.K. law, the common law definition is extensive. In the said law, the act is defined as taking any action with property of any form which is either wholly or in part the proceeds of a crime that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial ownership of said property. The goal of money laundering is to make funds derived from, or associated with, illicit activity appears legitimate. Money Laundering is a truly global phenomenon, helped by the international financial community which is a 24 hour a day business. When one financial center closes business for the day, another one is opening or is open for business. According to Philippine Law [REPUBLIC ACT NO. 9160] or known as the “Anti-Money Laundering Act of 2001.” SEC. 4. Money Laundering Offense. — Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. ACCORDING TO CDISCI5(SPECIALIZED CRIME INVESTIGATION 2 WITH SIMULATION ON INTERROGATION AND INTERVIEW) IT IS THE PRACTICE OF DISGUISING ILLEGALLY OBTAINED MONEY SO THAT THEY MAY SEEM LEGAL. Why is it called “Money Laundering”? The term "money laundering" is said to have originated with the Italian mafia criminals such as Al Capone who allegedly purchased 'Laundromats' to commingle (or mix) their illegal profits from prostitution and bootlegged liquor sales with legitimate business sales from the 'Laundromats' to obscure their illegal profit. HOW IS MONEY LAUNDERING DONE? Three Basic Steps to Change Illicit Funds to Legitimate Funds 1. Placement 2. Layering 3. Integration Placement involves changing the bulk cash derived from criminal activities into a more portable and less suspicious form, then getting those proceeds into the mainstream financial system. among the three steps, this is the most difficult and vulnerable, because most illegal activity generates profit in the form of cash. Cash is bulky when in large amounts, hence it is difficult to conceal. This means that, in this step, it is required to find a solution on how to move bulks of cash into manageable forms to be introduced into the legal financial stream. Layering Layering involves the movement of illegal funds, often mixed with funds of legitimate origins, through the world’s financial systems in numerous accounts through a financial or banking system to hide the funds origin. This insures that the funds are sent back into the mainstream economy, where they can be invested and spent freely. the most common method of layering is through wire transfer in offshore-banking havens such as the Cayman Islands, Panama, The Bahamas, The Netherlands Antilles, and, increasingly, Pakistan and Chile. Funds can be routed through shell corporations, or by using counterbalancing loan schemes. the sheer volume of wire transfer adds to the problem of the origin. What are Shell Companies and why are they mostly used in Off-shore Money Laundering? Shell companies are corporations created to protect or hide the assets of another company. They only exist on paper and have no physical location, staff, revenue, or significant assets, but they may have bank accounts or investments. While shell companies can be created quickly and affordably in the legal, financial system to raise funds, hold stocks, or serve as limited liability trustees, they are not necessarily illegal. However, they are often used for unlawful purposes, particularly as part of money laundering operations. Shell companies can be established by registered agents in most countries to hide Ultimate Beneficial Ownership (UBO). This means that shell companies can be set up with a level of secrecy and then used to conceal illegal funds, evade sanctions, and circumvent anti-money laundering (AML) measures used by companies to detect suspicious financial activity. Integration integration is the process of reintroducing the layered funds into the mainstream economy, where it can be invested and spent freely. once funds are sufficiently layered, it is then integrated into the mainstream financial world through as letters of credit, bonds securities, bank notes, bills of lading, and guarantees. Some if the largest seizures of laundered funds occur where integration fails, and the entire account or accounts are seized. Examples Collection of Dirty Money Placement Walter White’s Money Laundering Scheme Integration Layering End of Presentation
