Money Laundering Sources
Money Laundering Sources
1.Drug traffic: it is considered as the most important financial source in the illegal business. The important money operation is related to drug dealings.
2.Bribery: it is one of the sources that lead to have illegal money. Most of the laws prohibited the bribery in its different ways and have imposed some punishments when bribery takes place.
3.Money embezzlements: the crime of embezzling money is one of the important crimes that is related to administrative corruption. People who get the embezzled money tend to put it in banks outside the country with the intention of bringing it back in an illegal way.
4.The illegal evading from paying taxes: it is also called “tax cheating” or “tax evading”. This means that one can evade or escape from paying the due taxes through practicing cheating and counterfeiting in the records and breaking the taxation rules and laws. The evading process is considered one of the sources that lead to gain huge amounts of money that will become later a target for the money laundering operations.
5.The crime of money: these are crimes that aim to gain huge amounts of money and the people that commit such crime work on hiding or concealing its sources so it can look as if it is legal.
6.The crimes of people with white collars: these crimes are done by people who have a high position socially and economically while practicing their businesses.
7.The crimes of the politicians: the money laundering operations is connected to the political corruption that is associated with the utilization of the power and authority to gain the huge amounts of money then, smuggle it outside to be laundered and bring it back in a legal way. There is also the method of buying the stocks and assets where the money launderers buy perceptible assets such as cars, boats, real estate, precious stones, drawings for famous artists, or buying cash instruments like banking checks, paying orders, traveler‘s checks, notes and many other means. The most favored technique for the money launderers is buying commercial notes, especially depositing certificates, for example instead of depositing cash money which in many cases can be detected if the amount is big, it is divided into the ways of buying the notes which could be easily bought in value ranges between 100 and 100,000 dollars. Some commercial activities that can be used for laundering money are:
1.Operations of the equivalent markets: in this type of plans, the launderers tend to replace the dirty dollars with other foreign currencies and sometimes, they switch it back to dollars again.
2.Illusive deals: counterfeiting operations is considered one of the popular activities used in laundering money. With the use of exaggerated prices, money launderers can establish illusive companies or work with their partners for finding illusive bills where the prices included in these bills are either exaggerated to an extent exceeding the amount paid actually, or that the commodity is never bought at all.
3.Insurance companies: there is another planning for cash brokers in the free commercial areas which appears in accepting cash liquidity from the drug dealers to buy life insurance documents and get back its value by the virtue of checks.
4.Off shore companies: the off shore companies are traditionally used by money launderers. For example, a money launderer can establish commercial business in Lebanon as a cover for opening a commercial account in a bank. Then, the money launderers travels to one of the countries that are refuges for free taxation with the help of a lawyer or local agents to establish an external company in the free area. The local agent can be the owner and the boss of that company where the name of the launderer isn‘t used in any of the external documents. After that, the illusive company pretends to do some commercial activities and then transfer the dirty money telegraphically from the commercial account in Lebanon to the account of the external company in the free area.
This could be done through the counterfeited bills which are used to pretend that there are legal commercial dealings. As the dirty money is put in the Off Shore companies, it can be transferred telegraphically to any place in the world. Money laundering is not restricted to banks but in the banking field for example, the money launderers are used to collude with the employees of the banks administrations. This is often done by using methods of corruption to allow the passing of the special transaction related to transferring huge amounts to pass by without filling the application from or through splitting them into small amounts to avoid the procedures.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 4 October 2016
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