Illustrating the incentivised steps criminals take to launder cash while avoiding government anti-laundering measures
Pages | 515-526 |
DOI | https://doi.org/10.1108/JMLC-12-2019-0095 |
Date | 11 March 2020 |
Published date | 11 March 2020 |
Author | Nicholas Gilmour |
Subject Matter | Financial compliance/regulation,Financial crime,Accounting & Finance |
Illustrating the incentivised steps
criminals take to launder cash
while avoiding government
anti-laundering measures
Nicholas Gilmour
Faculty of Arts, The University of Auckland, Auckland, New Zealand
Abstract
Purpose –The purpose of this paper is to illustrate the incentivised steps criminals take to launder cash
while avoidinggovernment’s anti-money laundering (AML)measures.
Design/methodology/approach –To illustrate how and when technology is most prominent in the
money laundering process, this paper analyses the criminal’s methodological approach to “technology-
enhanced money laundering”by examining several high-level examples. To strengthen the theoretical
assessment and the overall validity of the findings,the author incorporates details from their own research
and professional experience to maximise comprehension of the methodological process that organised
criminals and money launderers alike look to undertake when placing illicitly derived cash in the money
launderingcycle.
Findings –The AML model of “placement, layering and integration”issynonymous with presenting the
process of money laundering –in the most basic or generic forms. This paper identifies that the placement
stage is a primary stagethrough which technology is exploited to assist in the entire laundering process.
Practical implications –Using money laundering casestudies, this paper identifies that existing AML/
countering terrorism financing international perceptions/practices and typological studies are not adequate
for presentingan accurate assessment of the process used to undertake money laundering.
Originality/value –This paper provides an examination of the practicalities behind the prevention of
money launderingfrom a compliance and investigative perspective.The paper is of interest to those involved
in policy,compliance and investigations associatedwith money laundering.
Keywords AML, Financial Action Task Force, Money laundering, Criminal investigation,
Compliance sector
Paper type Research paper
1. Introduction
Organised crime has embraced the modern era. Expanding at a rapid pace under the
premise of globalisation, organised crime has enhanced criminal networks and diversified
illicit activitiesto create a joint threat that is both volatile and destabilising. Accordingly,the
ability to launder illicitfunds, thus making them appear legitimate and unobtainable by law
enforcement has meant significant emphasis and commitment by organised criminals to
ensure success at all three stagesof the money laundering process. This three-stage process
is known as:
(1) placement –when illicit funds are placed into the regulated financial system;
(2) layering –when the funds are moved to disguise their origin; and
(3) integration –when the funds are used to purchase items or reinvest as apparent
legitimate funds.
Incentivised
steps criminals
take
515
Journalof Money Laundering
Control
Vol.23 No. 2, 2020
pp. 515-526
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-12-2019-0095
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