Stages and Definition of Money Laundering

University:
University of Georgia
Course:
FINA 3000 | Financial Management
Academic year:

2021
Views:

201

Pages:

2
Author:

Carissa Thomas

1-1 What is money laundering? 1-2 Give an example of the second stage of money laundering. 1-3 Give an example of the third stage of money laundering. 1-1 Money laundering involves taking criminal proceeds and disguising their illegal sources in order to use the funds to perform legal or illegal activities. Money laundering is the process of making dirty money look clean. 1-2 Electronically moving funds from one country to another and dividing them into advanced financial options and/or markets; moving funds from one financial institution to another or within accounts at the same institution; converting the cash placed into the system into monetary instruments; reselling high-value goods and prepaid access or stored value products; investing in real estate and other legitimate businesses; placing money in stocks, bonds, or life insurance products; and using shell companies to obscure the ultimate beneficial owner and assets. 1-3 Purchasing luxury assets such as property, artwork, jewelry, or highend automobiles; and entering into financial arrangements and other ventures in which investments can be made in business enterprises. 1-4 Blending of funds, purchasing significant stored value cards with currency, foreign exchange, breaking up amounts, currency smuggling, and loans. 1-4 Give an example of the first stage of money laundering. 1-5 What does the Yates Memo say? 1-6 What are some indicators of money laundering using electronic transfers of funds? 1-5 The Yates memo reminds prosecutors that criminal and civil investigations into corporate misconduct should also focus on individuals who perpetrated the wrongdoing. It notes that the resolution of a corporate case does not provide protection to individuals from criminal or civil liability. 1-6 Funds transfers to or from a financial secrecy haven or high-risk geographic location without an apparent business reason or when the activity is inconsistent with the customer’s business or history; large, incoming funds transfers on behalf of a foreign client with little or no explanation or apparent reason; checks and money orders used to receive many small, incoming transfers of funds or to make deposits; funds activity that is unexplained, repetitive, or reveals unusual patterns; payments or receipts that have no apparent link to legitimate contracts, goods, or services; and funds transfers sent or received from the same person to or from different accounts.