Money Laundering Prevention Deterring,

A how-to guide for the discovery and prevention of the illegal transfer of moneyWritten for the private sector-where most money laundering takes place-this book clearly explains shows business professionals how to deter, detect, and resolve financial fraud cases internally. It expertly provides an understanding of the mechanisms, tools to detect issues, and action lists to recover hidden funds. Provides action-oriented material that will show how to deter, detect, and resolve financial fraud cases Offers an understanding of the mechanisms, tools to detect issues, and action list to recover hidden funds Covers mechanisms for moving money, identifying risk exposures, and investigating money movementArming auditors, investigators, and compliance personnel with the guidance that, up until now, has been restricted to criminal investigators, Money Laundering Prevention provides nuts-and-bolts information needed to fully understand the money laundering process.

JONATHAN E. TURNER, CFE, CII, is a Managing Director with Wilson & Turner Incorporated, where he specializes in the prevention and detection of sophisticated financial fraud and employee crime issues. Prior to cofounding WTI, he served in investigations management positions with regional, national, and international investigations firms, with operational responsibility for thousands of investigations. He is a court-recognized expert in the investigation, documentation, and resolution of financial fraud matters. Turner is a commentator on fraud-related topics, including financial fraud schemes, employee fraud issues, and complex fraud schemes. He has been interviewed by the Wall Street Journal, the New York Times, and has appeared on ABC News, CNBC, and CNN programs.

Preface	p. xi
Acknowledgments	p. xix
Understanding the Process of Money Laundering	p. 1
What Is Money Laundering?	p. 1
Money Laundering Defined	p. 2
Why Do People Launder Money?	p. 4
The Money Laundering Cycle	p. 6
Money Laundering Is a Criminal Business	p. 10
Money Laundering Is Global	p. 11
Money Launderers Adapt Technology	p. 13
The Role of Technology	p. 14
The Role of Banks	p. 15
The Role of Nations	p. 17
Regional Hotspots	p. 18
The Birth of the Financial Action Task Force (FATF)	p. 20
Conclusion	p. 22
Motivations for Getting Involved	p. 23
Involvement Is Personal	p. 23
People Weigh the Odds of Success	p. 24
Where Do Laundered Funds Come From?	p. 26
The Impact of Corruption	p. 27
Why Is Corruption Increasing?	p. 28
Corruption Always Begins Small	p. 30
Bribery and Corruption of Your Employees	p. 31
Bribery and Corruption by Your Employees	p. 33
Evolution of Government Attitudes	p. 34
Official Corruption Impacts Individual Corruption	p. 35
Tax Evasion as a Gateway to Money Laundering	p. 36
Moving from Taxes to Criminal Activity	p. 37
The Rise of Regional and Multinational AML Organizations	p. 38
The Connection between Fraud and Money Laundering	p. 40
Money Laundering as a Do-It-Yourself Activity	p. 42
The Service Providers: Bankers, Accountants, and Lawyers	p. 42
Conclusion	p. 45
Mechanisms for Moving Money	p. 47
Money Laundering Requires Movement through the System	p. 47
Broken Windows Encourage Other Crimes	p. 48
Look Local, Think Global	p. 49
Expanding International Requirements	p. 51
Financial Havens Are Expanding	p. 52
Money Laundering Is a Growth Industry	p. 53
Law Enforcement Gets a Big Boost	p. 54
Profit Drives Criminal Activity	p. 56
Structuring the Scheme to Succeed	p. 57
Why Use a Bank, When You Can Own One?	p. 58
Learning from the Big Fraud Schemes	p. 59
Confronting the Inevitable	p. 60
Balancing Security and Cost	p. 61
Effective Fraud Prevention Strategies	p. 62
The Fraud Triangle	p. 63
Where to Start	p. 64
Mitigating Improper Behavior	p. 67
Conclusion	p. 68
Going Global	p. 71
Taking Money around the World	p. 71
Moving the Money Offshore	p. 72
Avoiding Detection	p. 74
Historical Basis for Money Laundering	p. 75
Role of Private Banking	p. 76
Enhanced Regulations	p. 77
The Black Market Peso Exchange	p. 79
Increasing Cooperation in Regulation	p. 80
Regional Distinctions	p. 81
Global Efforts	p. 83
The Law Enforcement Focus	p. 84
Conclusion	p. 87
Technology and Tomorrow	p. 89
The Impact of Technology	p. 89
The Next Phase of Money Laundering	p. 91
Everything Old Becomes New Again	p. 92
Being Anybody You Want to Be	p. 93
Welcome to the Future	p. 94
So What Is the AML Response?	p. 94
Evolution of AML Controls	p. 96
Adjusting to Rapidly Increasing Scale	p. 97
A Highly Flexible Methodology Results in Processes that Are Difficult to Stop	p. 99
AML Is a Process, Not a Destination	p. 100
All Countries' Regulatory Programs Are Not Equal	p. 101
Technology and Offshore Havens Intersect	p. 103
The Cost vs. the Benefit	p. 104
Consider the Pace of Change and Progress	p. 105
Conclusion	p. 106
Discovery and Prevention	p. 109
Early Warning Is Essential to AML	p. 109
Proactive Means Active	p. 110
By the Numbers	p. 111
Paradigm Shift	p. 112
Testing Your Own AML Systems	p. 114
Expanding the Business Comparison	p. 115
The Regulatory Framework	p. 116
High-Risk Areas	p. 117
Money Laundering Meets Terror Financing	p. 119
Hiding in Plain Sight	p. 121
Criminalizing the Concealment Activities	p. 122
Creating Financial Fronts	p. 124
Keeping the Money Moving	p. 125
Keeping the Tax Man Happy	p. 126
Conclusion	p. 128
Terror Financing	p. 131
Terrorists Use Money Laundering Techniques	p. 131
Similarities and Distinctions	p. 132
Application of the Methodology to Terror Financing	p. 133
Global Impact of Financial Crimes	p. 135
Alternative Laundering Mechanisms	p. 137
Regulatory Responses	p. 139
Conclusion	p. 141
Identifying Risk Exposures	p. 143
AML Exposures: Assessing Financial Institution Risk	p. 143
Language, Culture, and Ethnicity	p. 144
The Legal Landscape	p. 145
Geography: Distance Matters	p. 147
The Goal of the Launderer Is to Hide	p. 147
The United States Takes a Different Approach	p. 149
Laundering Groups Seek to Evade Detection	p. 151
A Fractured Enforcement and Regulatory Picture	p. 152
The Regulatory Position on Cyber Risks	p. 152
Simple Fraud, Still Successful	p. 154
Conclusion	p. 158
Investigating Money Movement	p. 159
Money Laundering Is Now Transnational Organized Crime	p. 159
Succeeding in the Investigative Process	p. 160
Government Access to Information	p. 161
Mining Data for Money Laundering	p. 163
Some Products Help the Perpetrators	p. 164
Investigating Virtual Payment Technologies	p. 165
Looking to the Future Investigative Issues	p. 167
Putting an Investigative Plan in Motion	p. 169
People Are Essential to Proof	p. 170
Finding Money Laundering Abroad	p. 172
Money Laundering Exposure during the Financial Industry Consolidation	p. 173
Conclusion	p. 177
Reporting and Recovery	p. 179
Reporting to Law Enforcement	p. 179
Honest People Act Differently	p. 180
Anticipating Challenges with Cyber Recoveries	p. 181
Building Appropriate Controls into Online Payment Systems	p. 183
Global Coordination on Future Issues	p. 185
Weighing Access vs. Privacy	p. 185
Compliance Issues	p. 187
Putting Recovery Plans into Action	p. 188
Conclusion	p. 191
Conclusion	p. 193
About the Author	p. 197
Index	p. 199
Table of Contents provided by Ingram. All Rights Reserved.

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Money Laundering Prevention Deterring, Detecting, and Resolving Financial Fraud

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Table of Contents

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