$ LAUNDERING – HOW IT’S DONE

WHY WE CAN’T FIND THE $

www.The-Infiltrator.com

MONEY LAUNDERING

Participate in a financial transaction for the purpose of:

– furthering a Specified Unlawful Act (SUA) or

– conceal / disguise the SUA origin of the funds

THE MONEY LAUNDERINGPROCESS

• Placement

• Layering

• Integration

TYPICAL $ LAUNDERING FRONTS

• Cash generating businesses (domestic & multi-national)

-Casa de Cambio (Money Transmitters) - Precious metals business

- Precious stones & jewelry businesses

- Check cashing businesses - Casinos

• Other techniques - Smurfing

TYPICAL $ LAUNDERING FRONTS (cont.)

- Illegal transport out of U.S.• Private plane• Commercial carrier• Containers• Within shipped goods

– Off-shore lending sources

– Import / Export businesses

– Global distributors of durable and bulk goods

– BLACK MARKET PESO EXCHANGE (BMPE)

BLACK MARKET MONEY EXCHANGES(INFORMAL VALUE TRANSFER SYSTEMS)

• Exist in most currencies and regions – (global)

• Many use due to cultural traditions or because these services are faster, cheaper, less bureaucratic and more convenient

• Facilitate an “underground banking system” producing an unconventional paper trail

• Colombian based traffickers use the BLACK MARKET PESO EXCHANGE (BMPE)

BMPE CLIENTS

• Drug Traffickers • Terrorists• Illegal Arms Dealers• Corrupt Political Figures• Customs Duty Evaders• Tax Evaders• Embargoed Goods Dealers• Inflationary Concerns• Targets of Terrorism• Family Transfers

BMPE ECONOMICS 101

+ SUPPLY OF DOLLARS

Conduct illegal acts in

the U.S. & live abroad

- DEMAND FOR DOLLARS

Foreign based tax/duty evaders buying legal goods with U.S. dollars

Narcotics’ Traffickers

Colombian Businesses

Pesos are given to Peso BrokerPeso

Broker

Pesos are paid to trafficker

Drugs are smuggled into the U.S. and sold for

U.S. dollars

Trade goods are shipped to

Colombia and sold

U.S. dollars are used to purchase goods or pay debts

with wires and checks

Vendors

U.S. dollars are used to purchase goods through

cash purchases

Colombia's representative (Undercover Agent)

Narco dollars are sold through Peso Brokers

to Colombian businesses

U.S. dollars are deposited into domestic bank

accounts

RED FLAGS RE BMPE CHECKS• Checks contain:

– Multiple style of entries • Handwritings vary• Inks vary• Contain type & writing

– Contain odd symbols• Rabbit/Smurf/Turtle

– Tape over amount

• Customer payments:– From multiple third party accounts– From multiple sources:

• Money Orders/Travelers Checks/Cashiers Checks

– From unrelated jurisdictions– From haven countries

ACQUIRING PESOS WITHOUT THE BMPE

REINTEGROS• Government export incentive

– Immediate exchange

– Favorable rate

– Value added reward

• Key elements– Export front

– Finance company

– Document of Exportation

– Local banker (corrupted)

THE CORPORATION’S VICARIOUS LIABILITY

• CORPORATION ACTS THROUGH ITS EMPLOYEES

• ACTS AND OMISSIONS ARE IMPUTED WHEN

- Made within the scope of employment

- Made, at least in part, with purpose to benefit the

corporation

- Whether the corporation actually benefited is

unimportant

- Corporation is responsible for collective knowledge

of employees

WRITTEN POLICIES & PROCEDURES STATEMENT

• Define Problem

• Identifies Applicable Law

• Affirms Sr. Management Commitment

• Outlines Compliance Program– Due Diligence & recordkeeping (enhanced 2002)– Training : Track & Record

• Designates Compliance Officer/Committee

• Outlines A Disciplinary Policy

INSTITUTIONAL MONEY LAUNDERING PLANS

• Private Client Divisions:– Gold for Dollars

– Locally booking off-shore $ in bulk

– Rep. Offices & private houses as courier receiving sites

– Rep. Offices & private houses as account review sites

• Institutional Plans:– Sinister Window

– Sale of dollar bonds to foreign institutions

– Use of buffer professionals (Attorneys or CPAs)

www.ChaseAndAssociates.com(727) 785-1273