The Hiding of Wealth
| Pages | 372-379 |
| Published date | 01 April 2002 |
| DOI | https://doi.org/10.1108/eb026037 |
| Date | 01 April 2002 |
| Author | Jürgen Storbeck |
| Subject Matter | Accounting & finance |
The Hiding of Wealth
Jürgen Storbeck
Journal of Financial Crime — Vol. 9 No. 4
INTRODUCTION
Law enforcement agencies as well as governments
have made major efforts to deprive criminal organi-
sations of their illegal gains, however, especially, if
not exclusively when the gains result from drug
trafficking. However, this seems be a very limited
view and approach, neglecting other criminal gains
of the same or even higher importance. Arguably,
one of the greatest proportions of concealed wealth
from the proceeds of crime is as a result of economic
or financial crime, including duty and tax evasion.
It is a significant indicator, that, in an era when
international drug trafficking is at its sensational
height, two EU member states have been categori-
cally cited as the main criminal threat to their society,
not that of drug trafficking and drug dealing, but that
of financial crime and fraud and money laundering.
Within the European Union, in Sweden the annual
turnover for the smuggling of alcohol amounts to
€330m. In terms of evasion of duties on tobacco,
one of the European Union transit countries for
cigarette smuggling, France, seized contraband goods
to the value of €19m in 2000. Without elaborating
further on an EU country-by-country basis on differ-
ing commodities concerning tax and revenue eva-
sion, the point is clear — all these illegal gains have
to be laundered.
At Europol, money laundering has been continu-
ally fought on an operational scale, and in so doing
hidden wealth continues to be brought to light.
One case involved proceeds from illegal immigra-
tion, and has affected four member states. A combi-
nation of speedy information exchange between the
Europol liaison officers of the different member
states was used, including analysis and consultation
with money laundering experts.
In one case over USS7m was detected as being
transferred through financial institutions in three
member states. Groups of money launderers, organi-
sers and couriers were identified. Intelligence infor-
mation regarding one criminal family in another
member state was expanded, and criminal monies
were traced back to their original banks in Latvia
and Russia. All the intelligence was collated and
analysed, and quickly disseminated to the member
states.
Another case, lasting only two weeks, involved
Europol analysts and liaison officers working together,
which revealed money flows of criminal monies from
Serbia via Cyprus into and transiting three member
states.
Some months later, during the Kosovo crisis
and when the international investigations com-
menced into Serbian criminal funds the intelligence
from this case, via the member states, was placed at
the disposal of the international teams conducting
the ongoing inquiries. Europol is continuously opera-
tional regarding money laundering and hidden crim-
inal wealth.
PROBLEMS AND FEATURES IN THE
GLOBAL FIGHT AGAINST MONEY
LAUNDERING
There are difficulties from an international law en-
forcement viewpoint regarding hidden criminal
wealth. There is the question of offshore or inap-
propriate jurisdictions, a problem highlighted in
several FATF reports. This is one area of vulnerability
in fighting money laundering. A principal example
of this is the Caribbean and similar areas, where sev-
eral jurisdictions appear with monotonous regularity
in various money laundering inquiries. In Sint
Maarten, for example, during 1998, money was laun-
dered by two Italian organised crime groups engaged
in heroin trafficking. The laundering of the proceeds
was linked to organised crime groups in Newark and
New York. Aruba was used in the late 1990s by Italian
and Colombian crime groups as one of four inter-
linked transit points for transferring drug monies. In
1998,
the Cayman Islands, with their 560 banking
institutions, were the place through which $460bn of
criminal money passed.
Throughout 2000, in various Europol inquiries and
operations into money laundering cases, links and
connections with both Aruba and Nauru have
come to light with monotonous regularity.
Croatia was for a period of five years exploitable
— and exploited — by organised crime groups,
and served as an offshore entity in terms of criminal
monies being invested and laundered with a high
degree of speed and anonymity. This was due to
certain factors, namely, an overbanked economy,
Journal of Financial Crime
Vol.
9 No 4,2002. pp 372-379
© Henry Stewart Publications
ISSN 1359-0790
Page 372
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