Money laundering, Terrorism, Regulation, Laws and legislation
| Pages | 92-94 |
| DOI | https://doi.org/10.1108/13685200410809814 |
| Date | 01 January 2004 |
| Published date | 01 January 2004 |
| Author | Stefan D. Cassella |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control Ð Vol. 7 No. 1
Reverse Money Laundering
Stefan D. Cassella
INTRODUCTION
A new form of money laundering involves not the
proceeds of past crimes, but money intended to be
used to commit crimes in the future.
Since the mid-1980s, virtually all of the developed
countries, and many of the developing countries,
have enacted legislation to make money laundering
a criminal oence. The statutes dier in complexity
and scope: some are quite simple and narrow,
making it an oence only to launder the proceeds
of drug tracking. Others are complicated and
broad, like the US statute which is several pages
long and makes it an oence to launder the proceeds
of any one of some 250 state, federal and foreign
crimes.
1
Still others are elegantly simple yet broader
still, succinctly stating that it is an oence to
conduct any ®nancial transaction with the purpose
of disguising the provenance of the funds in question.
The statutes also dier in terms of the penalties
provided: some only provide for incarceration,
while others authorise the con®scation of the
laundered property or any property involved in the
laundering oence.
2
But with only minor exceptions, these statutes
have one thing in common: they focus on the pro-
ceeds of crimes that have already been committed.
Every one of them asks, `what is the defendant
doing with the proceeds of his crime?' Is he engaging
in convoluted transactions to conceal or disguise the
source of the money? Is he commingling it with
other funds to disguise its whereabouts, or putting
it in third-party names to conceal or disguise its
ownership? Is he converting it to cash to avoid a
paper trail, or is he employing professional money
launderers to sell it for him on the black market so
that he can move the money out of the country or
convert it to another currency?
The ways in which the proceeds of crime can be
concealed or disguised are endless Ð particularly in
an age of ®nancial globalisation; and those responsible
for law and order are constantly Ð through revisions
to legislation, and through the development of new
investigative techniques Ð trying to keep up with
the inventiveness of the criminal mind.
But again, in all of these instances, focus has been
on the past; on looking backwards to see where the
money came from and how the criminal is trying
to disguise that source, and not forwards to see
what the money was going to be used for.
REVERSE MONEY LAUNDERING
But what about criminals who are using clean money
Ð or money froman unknown source Ð to commit
crimes in the future? Are they not capable of using
the same techniques and the same professional
money men to conceal the ownership of the money
and the purpose for which it will be used? Would
they not use the same convoluted transactions, the
same clandestine shipments of cash, the same inter-
national shell games whereby money is moved in
and out of dierent accounts in dierent countries,
disguised as legitimate funds, to ®nance new criminal
operations and enterprises?
The ®nancing of terrorism is the obvious example.
It is now known that the attacks of 11th September,
2001, were ®nanced with cash and wire transfers
from abroad. In one instance, money from a money
exchange in the United Arab Emirates passed
through a correspondent account at a New York
bank before being credited to the accounts of the
hijackers at another bank in Florida. In other
instances, the hijackers or their supporters simply
carried bundles of cash into the country. The
money may have had a legitimate origin Ð it
could have come from someone's personal fortune,
from funds raised for humanitarian aid, or from
any other source Ð but its purpose was deadly.
The lesson is simple: terrorism and many other
criminal acts can be ®nanced with perfectly clean
funds Ð funds that are shipped as cash, moved
through a money remitter, disguised as humanitarian
aid, or exchanged for imported goods like cigarettes,
jewels, or even foodstus, like honey. If the focus is
only on the source of the money moving through
the ®nancial channels, this will be completely
missed. It is the manner in which the money is
being moved that is the clue to the intended future
use of that money for dreadful purposes.
The process of conducting ®nancial transactions
with clean money for the purpose of concealing or
disguising the future use of that money to commit
Page 92
Journalof Money Laundering Control
Vol.7, No. 1, 2003, pp. 92± 94
#HenryStewart Publications
ISSN1368-5201
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