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(money luanderer smurfing’, or ‘structured deposits’ and then: (making…
money luanderer smurfing’, or ‘structured deposits’ and then:
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making deposits into a number of accounts opened using false identities at
different branches of the same bank
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depositing cash into accounts of third parties such as lawyers, real estate
agents and brokers
depositing cash with the help of corrupt bank staff who themselves
manipulate the deposits to make them appear as if they are below the reporting threshold.
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Placement
Those involved in organised crime, such as terrorist financing, drug trafficking, illegal gambling and prostitution, often acquire large amounts of money in the form of cash, often in small denomination bank notes.
In some countries, such as the US, Australia and Nigeria, all cash transactions over a determined figure (e.g. US$10,000), including deposits and withdrawals, must be reported by financial service providers.
US has, for some time, implemented a reporting requirement that obliges all businesses to file an IRS form 8300 for all goods and services purchased with cash in excess of US$10,000.
Why is money laundered?
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In order to fulfil this primary objective a launderer may first seek to achieve a number of secondary laundering objectives including:
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placing as much distance as possible between themselves and the property,
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Different jurisdictions have different tests of underlying criminality for money laundering purposes. The tests can be:
‘single criminality’, which looks solely at the underlying conduct with reference to the law of the jurisdiction where the money laundering occurs
‘dual criminality’, which requires the underlying conduct to be unlawful both in the country where the original crime takes place and with reference to the laws of the jurisdiction in which the money laundering takes place.
Intermingling
Money launderers often try to conceal criminally derived cash by mixing it with legitimately generated cash.
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Criminal offenses of money laundering are only committed when:
both the act of money laundering takes place and the person or business that handles the property has the required state of mind, i.e. knows or suspects or has reasonable grounds to suspect that the property derives from crime.