In accordance with the literature on money laundering, policymakers and researchers often use a model which distinguishes three successive stages: placement, layering and…
Abstract
Purpose
In accordance with the literature on money laundering, policymakers and researchers often use a model which distinguishes three successive stages: placement, layering and integration. But how well does this model compare to actual investigations of money laundering in relation to large-scale drug trafficking?
Design/methodology/approach
The basis is formed by data collected in 2012 for that year’s crime pattern analysis (CPA) for money laundering and cocaine trafficking. In all, 46 structured interviews were conducted. These interviews mostly centred around money laundering, involving the proceeds of drugs crime. As a result of the interviews, the dossiers from 16 criminal investigations were also obtained for further analysis.
Findings
Comparing the three-phase model with Dutch investigations on drug trafficking, three observations can be made. First of all, cash plays a larger role than the theoretical model would suggest. Second, the proceeds of crime are often moved abroad, circumventing the legal financial system. And third, money laundering often occurs in much simpler forms than the theory would lead one to suspect.
Research limitations/implications
The sources mainly involve criminal investigations into organized drug trafficking. Investigations involving white collar crime and fraud will probably generate different outcomes. Another caveat is that the situation in other countries may differ from the picture that emerges from the Dutch data.
Practical implications
Combating money laundering is sometimes a job for specialists, but many forms (involving cash and moving money around) can easily be left to ordinary investigative officers with no financial background. Money laundering therefore needs to be demystified to broaden the opportunities for investigating analyzing and researching money laundering. Furthermore, it is not always practical to depend on Financial Intelligence Unit’s information to start an investigation or to evaluate anti-money laundering efficiency.
Originality/value
The literature on money laundering often centres around judicial system, legal issues and theoretical solutions. Empirical data is hard to come by. This article uses information from actual investigations to illustrate aspects of money laundering that can be overlooked.
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The purpose of this paper is to analyse the complicity of wives/girlfriends of a criminal if she benefits from the proceeds of the criminal's illicit activities.
Abstract
Purpose
The purpose of this paper is to analyse the complicity of wives/girlfriends of a criminal if she benefits from the proceeds of the criminal's illicit activities.
Design/methodology/approach
The paper presents analysis of 62 investigations into organised crime through interviews.
Findings
Although spouses/wives benefit from the criminal proceeds of their husbands, they are hardly ever prosecuted on this basis alone. Only if they are actively involved in money laundering, are they more likely to be prosecuted.
Research limitations/implications
Analyzing police data has certain drawbacks. Socio‐economic data are often non‐existent.
Practical implications
Relatively, few of the wives/girlfriends were tried in connection with these crimes. This paper indicates several possible reasons for this.
Originality/value
This paper points out a logical consequence of the legal interpretation of money laundering.
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The purpose of this paper is to broaden the discussion on trade-based money laundering (TBML). The literature is too narrowly focused on the misrepresentation of the value…
Abstract
Purpose
The purpose of this paper is to broaden the discussion on trade-based money laundering (TBML). The literature is too narrowly focused on the misrepresentation of the value, quantity or quality of the traded goods. This focus leads to the analysis of price anomalies as a signal of over- or under-invoicing. However, TBML can also occur without manipulation of these factors.
Design/methodology/approach
A review of the literature and case study of police investigations.
Findings
Financial action task force (FATF) definitions are seriously flawed. The question of whether detecting TBML on the basis of statistical trade data is effective should be much more open to debate. Police investigations show that goods are shipped at their true value within the context of TBML.
Research limitations/implications
Using outliers to identify and act on cases of TBML has often been propagated, but scarcely been used to actually show TBML. Real findings are needed.
Practical implications
Goods intended for TBML can also be paid for in cash. These cash payments are often out of character with the normal clientele. This should alert companies and compliance sections of banks alike.
Originality/value
The critique on the FATF definition opens the field for a more fitting definition. The description of actual TBML cases makes it possible to better understand this method of money laundering.
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Petrus C. van Duyne and Melvin R.J. Soudijn
The purpose of this paper is to generally express concern about the threat of crime‐money to the real estate sector and the lack of evidence coming forward from research and law…
Abstract
Purpose
The purpose of this paper is to generally express concern about the threat of crime‐money to the real estate sector and the lack of evidence coming forward from research and law enforcement.
Design/methodology/approach
In addition to a review of the literature, this research project analysed the confiscation database of the Dutch prosecution office. From this base, the real estate confiscations from 2000 onwards were selected and analysed. The database management of the prosecution office proved to be extremely negligent.
Findings
The results could not substantiate the general concern that the crime‐money from the “underworld” was a real threat to the real estate market. Criminals did spend money on buying houses, sometimes big villas and a few of them had more property which was let. But this small financial criminal elite was widely spread over time and space.
Research limitations/implications
This research has to be continued on a cross‐country comparative basis, for which the first steps have been taken. In addition, the database analysis has to be complemented with an in‐depth criminal file analysis. This has started as a follow‐up study too.
Practical implications
The first practical outcome is that more must happen to lift “evidence based policy making” from its state of empty rhetoric: with the present database management there is no such a thing as “evidence base policy making”. The second practical implication is that crime‐money and laundering as a cross‐border phenomenon remains hardly understood as long data comparison are impossible due to the lack of common databases, which in addition are internationally polluted.
Originality/value
The paper is really new as there are no precedents thus far. This is regrettable, as research needs a stimulating surrounding. However, few scholars step forward while the law enforcement agencies are most reluctant to share data, even if anonymised.
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Irish Scheel Honga, Constance Gikonyo and Evelyne Asaala
This paper aims to address the existing gap in the anti-money laundering/counter-financing of terrorism (AML/CFT) regime and explore the possibility and effectiveness of…
Abstract
Purpose
This paper aims to address the existing gap in the anti-money laundering/counter-financing of terrorism (AML/CFT) regime and explore the possibility and effectiveness of disentangling the nexus between the two concepts.
Design/methodology/approach
The approach undertaken is doctrinal legal research by employing rigorous analysis of the legal terms of terrorism financing and money laundering.
Findings
Upon analysis, the study confirms that the two concepts are distinct; there is a slight overlap in the methods of acquisition of funds for both terrorists and money laundering; however, the purpose and intention of the two are totally separate and therefore creates a need for singular approach in tackling the two concepts. Enhanced collaboration between states and increased financial technologies will aid in better tackling of the two menaces.
Research limitations/implications
The research is limited to a desk review approach.
Practical implications
The study confirms the argument that the AML/CFT approach is ineffective in tackling money laundering and terrorism financing.
Originality/value
This paper delves into a deeper analysis of money laundering and terrorism financing and provides a nuanced understanding of the differences between the two terms.