In the field of Financial Crime Risk, operations, compliance, management, detection, investigations and prevention, the Professional Anti Money Laundering (AMl) specialists and crime professionals have failed to agree when or where the concept and act of “money laundering” came from or invented! Some have argued that AML was not invented during the Prohibition era in the United States, but many techniques were developed and refined then. Many methods were devised to disguise the origins of money generated by the sale of then illegal alcoholic beverages. Many have Followed Al Capone’s 1931 conviction for tax evasion! Remember though that mobster Meyer Lansky transferred funds from New Orleans slot machines to accounts overseas. Again after the 1934 Swiss Banking Act which created the principle of bank secrecy, Meyer Lansky bought a Swiss bank where he did transfer his illegal funds through a complex system of shell companies, holding companies and offshore accounts. The term of “money laundering” itself does not derive, as is often said, from the story that Al Capone used laundromats to hide ill-gotten gains. Others have stated and categorically so that it was Meyer Lansky that perfected money laundering’s older brother, “capital flight”, transferring his funds to Switzerland and other offshore places. Yet others have argued that the first reference to the term “money laundering” itself actually appeared during the Watergate scandal. US President Richard Nixon’s “Committee to Re-elect the President” moved illegal campaign contributions to Mexico, then brought the money back through a company in Miami. It was Britain’s Guardian newspaper that coined the term, referring to the process as “laundering.” Yet still the Aml story may not be complete without the mention of one notorious character known as Pablo Escobar. The bloody leader of one of the most profitable of the Medellin drug gangs. At one time his gang was so successful that they were spending $2,500 of dollars a month on rubber bands to wrap around their bundles of cash. Corruption and intimidation characterized Escobar’s dealings with the Colombian system. He had an effective, inescapable policy in dealing with law enforcement and the government, referred to as “plata o plomo,” (literally silver or lead, colloquially [accept] money or [face] bullets). This resulted in the deaths of hundreds of individuals, including civilians, policemen and state officials. It has been well documented that Escobar bribed countless government officials, judges and other politicians! The son of a gun used banks heavily to launder his gang’s cash and it is worth remembering that money laundering represents the proceeds of some very unpleasant activities indeed and sources! Drugs, corruption, illegal arms deals and other serious predicate offenses of AML! Stay blessed!
Published by Kemman
Regulatory and Independent Consulting Professional with expertise in Financial Crime Risk Compliance encompassing Anti-Money Laundering (AML), Countering Terrorism Financing (CTF), Anti-Bribery & Corruption (ABC – FCPA & UKAB), Global Trade & Sanctions, Bank Secrecy Act (BSA), Know Your Customer (KYC) and Customer Due Diligence (CDD), Internal Audit Testing, Reviews, Validation, Risk Assessment. Worked in Asia, Africa, Europe, the Middle East, North America (USA). Banking & FinTech, Anti-Sex & Human Trafficking Advocate, FOREX & Cryptocurrency trading, Travel & Tours, Telecommunications & Energy. View more posts