Chapter 3

Mechanisms for Moving Money

Money Laundering Requires Movement through the System

The definition of money laundering, and recognizing money laundering motivations, provide the basis for building an effective anti-money-laundering (AML) program within the legal framework of a country and within the organizational structure of individual companies.

As an increased understanding of the risk of AML grows, the world's largest financial institutions are seen as the highest risk for the concentration and movement of funds. Since the internal data of these institutions comprise a detailed and rich database of transactions, AML specialists see the mining of this data as a way to discover money laundering activities. From sorting through these databases of large financial institutions, it should be possible to identify the actual risk level of money laundering, that is, whether it is fraud, corruption, or even terrorism.

This is well known to the money launderers who use these very same means of modern commerce to disguise the source of their income and its origins, ownership, direction, and beneficiaries. Since they seek to end up with “clean” money and legal access to that money, they must find ways to move it through legitimate institutions, creating credible documentation, and avoiding discovery by these AML specialists.

Cash is still the preference for illicit transactions. People, aware of the illegal nature of illicit activities, are reluctant to create clear paper trails ...

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