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KEY TAKEAWAYS. AML vs. KYC. AML Holding Period. History of Anti Money Laundering (AML). White-Collar Crime. What is White-Collar Crime?
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KEY TAKEAWAYS
· Criminals use money laundering to conceal their crimes and the money derived from them.
· Anti Money Laundering seeks to deter criminals by making it harder for them to hide the loot.
· Financial institutions are required to monitor customers' transactions and report on anything suspicious.
Criminals often try to " launder" the money they obtain illegally through acts such as drug trafficking so that it can't easily be traced back to them. One of the most common techniques is to run the money through a legitimate cash-based business owned by the criminal organization or its confederates. The supposedly legitimate business can deposit the money, which the criminals can then withdraw.
Money launderers may also sneak cash into foreign countries to deposit it, deposit cash in smaller increments that are likely to arouse suspicion or use it to buy other cash instruments. Launderers will sometimes invest the money, using dishonest brokers who are willing to ignore the rules in return for large commissions.
Money launderers often try to disguise illegally obtained money by running it through a legitimate cash business.
It's up to financial institutions to monitor their customers' deposits and other transactions to ensure they aren't part of a money-laundering scheme. The institutions must verify where large sums of money originated, monitor suspicious activities, and report cash transactions exceeding $10, 000. Besides complying with AML laws, financial institutions must make sure that clients are aware of them.
Money-laundering investigations by police and other law enforcement agencies often involve scrutinizing financial records for inconsistencies or suspicious activity. In today's regulatory environment, extensive records are kept on just about every significant financial transaction. So when police try to trace a crime to its perpetrators, few methods are more effective than locating the records of financial transactions they were involved in.
In cases of robbery, embezzlement, or larceny, the law enforcement agency can frequently return the funds or property uncovered during the money-laundering investigation to the victims of the crime. For example, if an agency discovers money a criminal laundered to cover up embezzlement, the agency can usually trace it back to those from whom it was embezzled.
AML vs. KYC
The difference between AML and KYC (Know Your Customer). In banking, KYC is the process that institutions must take in order to verify their customer's identities before providing services. AML operates on a much broader level and are the measures that institutions take to prevent and combat money laundering, terrorism financing, and other financial crimes. Banks use AML/KYC compliance to maintain secure financial institutions.
AML Holding Period
One anti-money laundering method is the AML holding period which requires deposits to remain in an account for a minimum of five trading days. This holding period is intended to help in anti-money laundering and risk management.
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History of Anti Money Laundering (AML)
Anti-money-laundering initiatives rose to global prominence in 1989, when a group of countries and organizations around the world formed the Financial Action Task Force (FATF). Its mission is to devise international standards to prevent money laundering and to promote the implementation of those standards. In October 2001, shortly after the 9/11 terrorist attacks on the United States, FATF expanded its mandate to include efforts to combat terrorist financing.
Another important organization involved in the fight against money laundering is the International Monetary Fund (IMF). Like the FATF, the IMF has also pressed its 189 member countries to comply with international standards to thwart terrorist financing.
https: //www. investopedia. com/terms/w/white-collar-crime. asp
White-Collar Crime
REVIEWED BY JAMES CHEN
What is White-Collar Crime?
White-collar crime is nonviolent crime committed for financial gain. According to the FBI, a key agency that investigates these offenses, " these crimes are characterized by deceit, concealment, or violation of trust. " The motivation for these crimes is to obtain or avoid losing money, property, or services, or to secure a personal or business advantage.
Examples of white-collar crimes include securities fraud, embezzlement, corporate fraud, and money laundering. In addition to the FBI, entities that investigate white-collar crime include the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), and state authorities.
KEY TAKEAWAYS
+ White-collar crime is non-violent wrongdoing that financially enriches its perpetrators
+ These crimes include misrepresentation of a corporation's finances in order to deceive regulators and others
+ A host of other offenses involve fraudulent investment opportunities in which potential returns are exaggerated and risks are portrayed as minimal or non-existent
White-collar crime has been associated with the educated and affluent ever since the term was first coined in 1949 by sociologist Edwin Sutherland, who defined it as " crime committed by a person of respectability and high social status in the course of their occupation. "
In the decades since, the range of white-collar crimes has vastly expanded as new technology and new financial products and arrangements have inspired a host of new offenses. High-profile individuals convicted of white-collar crimes in recent decades include Ivan Boesky, Bernard Ebbers, Michael Milken, and Bernie Madoff. And rampant new white-collar crimes facilitated by the internet include so-called Nigerian scams, in which fraudulent e-mails request help in sending a substantial amount of money.
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