Financial Crime in the 21st Century

Financial Crime in the 21st Century

Law and Policy

Nicholas Ryder

This book focuses on the financial crime policies adopted by the international community and how these have been implemented in the United Kingdom and the United States of America.

Chapter 2: Money Laundering

Nicholas Ryder

Subjects: economics and finance, financial economics and regulation, law - academic, corruption and economic crime, finance and banking law


Globalisation has increased the scope and extent of money laundering. With lightning speed, money can be wired from Yemen to terrorists in Florida for the destruction of buildings in New York and Washington. Business corruption, drug trafficking, arms smuggling and terrorism are sustained by the loopholes in the financial structure that allow illegal funds to slip through the system undetected.1 2.1 INTRODUCTION The goal of a large number of criminal acts is to generate a profit for the individuals or groups that carry out the acts. Money laundering is the process by which organized criminals and drug cartels disguise their proceeds of crime. It is of critical importance to them, as it enables them to enjoy the profits without jeopardizing their source. Money laundering is a criminal activity that involves the practice of concealing assets to avoid any discovery of the unlawful activity that fashioned them. The historical development of money laundering is largely contained in the myth that the term was first used by Al Capone.2 In its early origins, organized criminals laundered their proceeds of crime through cash intensive businesses such as casinos.3 By the 1950s it was already a complicated and cleverly planned system of financial management.4 The first reported sighting of the term ‘money laundering’ in a legal context was in the case of US v $4,255,625.39.5 Money laundering was criminalized in both the United Lacey, K. and George, N. (2003), ‘Crackdown on money laundering: a comparative analysis of the feasibility and effectiveness of...

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