NCJ Number
96192
Date Published
1985
Length
12 pages
Annotation
After describing the 'money laundering' process typically used by organized crime, this paper examines some strategies for improving efforts to combat 'laundering.'
Abstract
Money laundering describes two distinct types of process. In its most limited sense, laundering describes the conversion of cash by exchanging a volume of illegally earned currency for some type of negotiable instrument or other asset that can be used in legitimate commerce without revealing the illegal source of the funds used to purchase it. In its second and more widely accepted usage, money laundering involves a sequence of steps that begins where the currency conversion process leaves off. In this process, laundering is a method for acquiring an asset, so that the owner may both account for and enjoy wealth while remaining protected from probes into the origins of the wealth. Improved currency reporting by banks could help to counter laundering. Particular problems that should be addressed in this area are the lack of emphasis on validating the identity of the party making the currency exchange and the bank's having discretion as to when to exempt customers who exchange currency frequently from filing the required reports. Innovative law enforcement techniques to counter laundering include Federal investigators posing as drug traffickers and trying to enlist bank personnel, financial advisers, and others in violations of Treasury reporting requirements. Regarding law enforcement efforts, there is a need for all Federal agents who investigate narcotics, organized crime, tax, and currency violations to develop skills in investigating laundering. It should be recognized, however, that laundering results from the law enforcement focus on organized crime activities and is to be preferred to the reinvestment of criminal monies in additional criminal enterprises. Laundering is thus a form of negotiated order and implicit regulation. Five notes are listed.