Money laundering and asset cloaking techniques
| Date | 04 January 2008 |
| Pages | 15-24 |
| DOI | https://doi.org/10.1108/13685200810844460 |
| Published date | 04 January 2008 |
| Author | Jeffrey Simser |
| Subject Matter | Accounting & finance |
Money laundering and asset
cloaking techniques
Jeffrey Simser
Civil Remedies for Illicit Activities Office,
Ministry of the Attorney General, Toronto, Canada
Abstract
Purpose – The purpose of this paper is to explore the various typologies and methods used to cloak
assets following the placement stage of money laundering.
Design/methodology/approach – Techniques used to hide assets and cloak ownership, ranging
from simple nominee arrangements through to complex financial transactions are explored.
Findings – There are a myriad of methods available to money launderers to cloak their assets.
Research limitations/implications – More work needs to be done on the issue of information
gateways.
Practical implications – Assets are cloaked to obfuscate the trail and make it difficult for law
enforcement to “follow the money”. Understanding the methodologies used is the first step to
understanding the problem.
Originality/value – A number of cases from Canada, the USA and Australia were studied, as well as
reference material advisors use for asset protection.
Keywords Money laundering,Criminal forfeiture, Canada,United States of America, Australia
Paper type Research paper
Asset protection is consistent with the broad financial objectives of corporate and
shareholder wealth maximization. Risk is balanced with opportunity in pursuit of wealth[1].
This paper explores the various typologies and methods used to cloak assets[2]
following the placement stage of money laundering. Successfully laundered money has
a concealed provenance. In a long and engaging article, Cuellar (2003) argues that there
is an all too tenuous relationship between the techniques and detection systems used
against money laundering and law enforcement’s goal of disrupting criminal finance.
He argues that the focus on cash creates systemic blind spots. The argument is
misguided: cash and the placement of cash into the financial system bears continued
focus and attention[3]. Organized crime is vulnerable at the point of sale: 44 pounds of
cocaine translates to 220 pounds of $10 bills at street level; handling that cash,
particularly in the face of barriers like currency transaction reporting, complicates
drug dealing and potentially exposes the business to law enforcement (Simser, 2006).
There is merit, however, in asking what happens to the cash that gets into the financial
system. This paper focuses on that question reviewing asset cloaking techniques. This
paper intentionally ignores large issues relevant to money laundering (hawala, hundi,
and da shu gong si and so on)[4].
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
The views expressed herein are those of the author and do not represent the views of Ministry of
the Attorney General or the Government of Ontario.
Money
laundering and
asset cloaking
15
Journal of Money Laundering Control
Vol. 11 No. 1, 2008
pp. 15-24
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685200810844460
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