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Money Laundering

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Money Laundering

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    1. Money Laundering

    2. AGENDA

    3. AGENDA

    4. ML PROCES

    5. ML PROCES

    6. AGENDA

    7. FAVOURABLE CONDITIONS Cash based business & economy Banking and professional secrecy (banks and lawyers) Corruption Lack of/weak AML legislation (shell companies) Non performing economies

    8. WHY GOVERNEMENTS CANNOT BEAT ML ML = International Business, politics and laws = local Politics is focussed on re-election = visible performance. Effective AML is not one of them International AML government chain is as strong as the weakest jurisdiction ML = the real world, politics = …….

    9. AGENDA

    10. THE ML PROFILE A flexible and creative business M/W The business is illegal not the M/W: dislike the business not the M/W Smart, nice and charming Access to the best lawyers and advisors Professional

    11. THE ML PROFILE Understanding of impact of own behaviour on others, great emphatic skills Good lyer, understands the psychology of distraction and deception But at the end: he/she is human and makes mistakes

    12. AGENDA

    13. AGENDA

    14. ML METHODS

    15. TYPOLOGY Concealment with business structures Use of legitimate business Use of false documents or straw men Exploiting international jurisdictional issues Use of anonymous asset types

    16. CONCEALMENT IN EXISTING BUSINESS Conceal criminal funds within normal existing business Most attractive typology: Movements or fluctuations on the account do not have a suspicious appearance Business has a legitimate reason for transfer of large funds Cash based business justifies (large) cash transactions Concealed link between the company and the launderer ( structures, beneficial ownership)

    17. USE OF LEGITIMATE BUSINESS Use of an existing business for laundering without the awareness of the business (professionals such as: lawyers, accountants) Advantage: criminal funds will be seen as originating from the innocent firm used

    18. USE OF FALSE DOCUMENTS OR STRAW MEN Use of falsified documents such as identity papers, incorporation deeds, trade documents, loan agreements, invoices etc to support cover stories Criminal funds owned by individuals with no criminal records but controlled by the launderer/criminal

    19. INTERNATIONAL JURISDICTIONAL ISSUES To make the investigators life difficult in following the trail by using differences in laws and regulations with regard to taxation, professional secrecy, company formation etc. The more jurisdictions involved the more successful this typology is

    20. USE OF ANONYMOUS ASSET TYPES Anonymous; no provable link between ownership and asset such as cash, gold, jewellery, art etc. No audit trail unless the launderer is caught whilst carrying the asset or interacting with the asset

    21. TECHNIQUES Corresponding – and Private banking Insurance products Gate keepers professional secrecy Mixing with legitimate cash flow Smurfing Credit cards Reverse flip Back to back lending

    22. CORRESPONDENT BANKING

    23. PRIVATE BANKING Corporate, investment and trust vehicles for tax/wealth planning including asset management Advantages for launderer: High level of confidentiality & secrecy Personal relationship banker & client High economic dependency

    24. INSURANCE PRODUCTS Mainly life and pension insurance

    25. GATE KEEPERS Lawyers/accountants: professional secrecy

    26. GATE KEEPERS Casino's

    27. MIXING WITH LEGITIMATE CASH FLOW Taxi company

    28. SMURFING

    29. CREDIT CARDS

    30. REVERSE FLIP Property transaction: Purchase of property below market value Difference paid unofficially in cash Sale of the property at market value Difference paid = laundered

    31. BACK TO BACK

    32. GATE KEEPERS & BACK TO BACK

    33. DISTRACTION AND DECEPTION Personal long term relationship: creates trust and can lead to blindness Time pressure: focus is moved to reaching the deadline Sequence of documents: the best first can lead to less attention to the last ones False documents: creates an appearance

    34. DISTRACTION AND DECEPTION Threat of collapsing ego’s: admitting you don’t understand the transaction is sometimes difficult Commercial impact: loss of business = loss of performance of the account manager Narcotic effect success: pretending network and successful business blinds

    35. DISTRACTION AND DECEPTION Reference letter of well known business partner: reference letter based on legitimate business with a well known company Loss acceptance: accepting expenses or losses to fake a substance such as goods flow, contracts and payroll

    36. AGENDA

    37. INDICATORS Detailed, numerous and impossible to learn by heart Known by the money launderer Risk of distraction by focussing on known indicators Useful mind setters only

    38. BASIC INDICATORS (EGMONT GROUP) Large-scale cash transactions A-typical or un-economical fund transfer to or from a foreign jurisdiction Unusual business activity or transfer Large and/or rapid movements of funds Unrealistic wealth compared to the client profile (private persons & company) Defensive stance to questioning

    39. INDICATORS

    40. AGENDA

    43. KEY ELEMENTS CDD Identity and activities of a client Identity of the beneficial owner/shareholder of a company Identity of the Directors of a company The existence, purpose and activities of a company Source of the funds including supporting documents Transaction monitoring

    44. QUESTIONS AND ANSWERS

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