The best estimates suggest that the amount of money laundered each year internationally is close to 1.5 trillion dollars (U.S.D.). Further, we must realize that the vast majority of all money laundered is directly linked to transnational criminal organizations (terrorist organizations included). These organizations create a profit by committing various criminal acts. Hence, the definition of money laundering: The processes of manipulating the profits and proceeds of criminal acts by disguising its illegal origin to make those funds appear to have been obtained legally. This process enables criminal organizations to continue their endeavors. This is the choke point for these criminal organizations, without money drug dealers can’t operate, arms traffickers falter, and identity thieves fall flat. Stop the money flow and it’s like throwing water on the money laundering flame.
Countries that have the best Anti-Money Laundering programs follow a three- prong approach.
- Financial Institutions that follow a set of AML rules and regulations, and;
- A Regulatory unit that monitors the financial institutions for compliance with the rules and regulations and;
- Law Enforcement to investigate, arrest, and prosecute.
There is a direct connection to money laundering and various geographical locations that have weak AML programs. Additionally there are numerous geographical locations have very strong bank secrecy laws which make it difficult for law enforcement to see behind the curtain. The combination of the two usually results in a money laundering haven. Fortunately, most of the established free world is on board with AML concepts and have adopted, in some form, the 40 recommendations of the Financial Action Task Force, which is a guideline for countries dealing with financial crimes.
Developing a Program
Assuming that the basic prerequisites have been secured, such as manpower, and budget then the following items should be addressed.
- Develop a national plan of action that will allow competent authorities to coordinate with each other concerning the creation and realization of policies and actions to combat money laundering.
- Establish clearly defined roles and coordination procedures – Depending on the manpower, where will your anti-money laundering efforts be focused? Terrorist financing? Narco dollars? White Collar Crimes? Whatever the decision, make sure that there is no duplication of efforts between law enforcement agencies. For example, a possible terrorist financing case should be referred to the financial component of a terrorism unit and not investigated by an AML team working mob cases.
- Construct criteria for developing an investigation formula. Understand that you will not have the manpower and/or time to investigate everything.
o Investigation of the underlying criminal cases (i.e. drugs, guns, embezzlements) that fit the criteria should be required to establish a financial component for each and every case.
- Create not just a money laundering detail, but a financial intelligence unit that can properly control information and memorialize, analyze and forward all relevant data.
o Explore information that is provided by various financial institutions that are compliant with the countries AML policies. For example, review suspicious transaction reports (STR’s).
o Monitor other units’ investigations for possible actionable intelligence. Realize that 95% of all crimes are committed for greed. Hence, most all crimes, when followed to higher hierarchal levels, will lead to money laundering.
- Develop de-confliction mechanisms for purposes of officer safety and eliminate redundancies.
- Strongly consider a task force style of unit with the cooperation and assistance of local law enforcement (providing that does not pose a security risk itself). Memorandum of Understanding to detail involvement, finances and asset sharing.
- Consider having the prosecuting attorney on board from the beginning of any investigation.
- Network with financial institutions and regulators.
- Training – All members should be trained to at least a minimum level of money laundering competency. Further, training should be ongoing and continuous.
o Basic and strategic money laundering techniques
o Understanding the various money laundering laws and international standards.
o Fostering relations with financial institutions
o Due Diligence and Sources of Information
o Asset Forfeiture
These suggestions are merely the beginning. To create and develop a money laundering unit requires the buy in and commitment of upper level management. For years the perpetuating myth in law enforcement has been that a member has to be an accountant to be involved in financial crimes. This is incorrect. Does a member need be a forensic pathologist to be a homicide investigator? A chemist to be a narc? The answer, of course, is no. However the work of a pathologist, chemist or accountant might be considered tools that eventually are required to review and analyze the intricacies of a case. Nevertheless, a good solid understanding of money laundering and basic investigative skills would be a great beginning to any law enforcement member considered for this specialty unit.
