Question

If you were a federal investigator assigned to a task force focused on identifying money laundering operations in your community, which types of businesses or organizations would you begin investigating based on the four methods commonly used by criminals to launder illegally earned money, and why.

Answer 1

Money laundering is the term used for any process that 'cleans' illegally obtained funds& allowing them to be used with in the legal economy. The extent of money laundering is hard to access. The international monetary fund estimates between 2 & 5 percent of world GDP is linked with black market activity. Most of the money laundering methods share three basic steps- 1. Placement- placement is where a legally obtained money is converted into assests that seemed to be legitimate that often done by depositing funds into a bank account registered to an anonymous person or corporation who were professional middleman. In this step criminals are most vulnerable to detection since they introduce massive wealth into the financial system seemed to be out of nothing. 2. Layering- It involves usingmultiple transactions to further distance the funds from their origin. This can take the form of tranfers between multiple accounts over purchase of tradeable assets and property like real estate, expensive cars including funding their own lifestyles. In this way money is ultimately brought back to the offender as legitimate money. 3. Integration-- which allows clean money to reenter the mainstream economy and to benefit the original offender.They might invest into legal business claim payment by making fake bills. The other methods includes-a) structuring of banking huge amont of money into smaller transactions in order to avoid detection of tax authorities, b) Use of currency exchanges, electronic money transfer methods to move illegal money across the globe in different parts of the countries, c) investing in mobile commodities like gems & gold that can be easily moved to another authority or jurisdiction.d) Investing in & selling valuable assets such as real estate. e) use of anonymous on line payment services, person to person tranfers through mobile phones & use of virtual currencies like Bitcoins have made detecting illegal tranfer of money more difficult. In order to curb money laundering 1. More strict laws are to be enacted so that no one can escape financial crimes.2. to identify the actual offender through checks on the identity of the client. 3. to identify real beneficiary of a particular deal between two parties.4. to encouage anti money laundering measures & policies in government & private offices.