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• Drug dealer simulator general risk factor series#

The Bank Secrecy Act (1970) obligates financial institutions to report cash transactions in excess of $10,000 using the Currency Transaction Report (CTR) and requires individuals to report the transportation of currency in excess of $5,000 (now $10,000) into or out of the United States. laws, regulations, and directives have sought to scrutinize movements of large cash transactions and suspicious financial activities.

Drug dealer simulator general risk factor series#

Money launderers also use various offshore banking havens such as Panama, the Cayman Islands, the Bahamas, Aruba, Liechtenstein, and the Isle of Man.īetween 19, a series of U.S. Other laundering schemes involve casinos, gems and precious metals, wire transfer companies, and smuggling currency out of the United States. banking system and later sells the inventory of dollars to Colombian importers who bring in various legal goods, such as cigarettes or computers. The broker assumes the risk of introducing the laundered funds into the U.S. Once the dollars are delivered to the U.S.-based agent, the Colombian broker deposits the agreed-upon funds in pesos in the traffickers’ account. The system involves Colombian traffickers who sell their dollar profits at a discount to agents in the U.S. One method, “structuring,” involves breaking up large amounts of cash into transactions that amount to less than $10,000 to avoid currency-reporting requirements.Īt present, the Colombian Black Market Peso Exchange method “is the single most efficient and extensive money laundering ‘system’ in the Western Hemisphere,” according to FinCEN.

Innumerable schemes have been devised to hide the large sums of currency that are generated by illicit drug sales. This can be done, for instance, via front companies, false invoicing, purchase of financial instruments (stocks, bonds, and certificates of deposit), or investment in real estate, tourism, and other legitimate businesses. In the third stage, “integration,” a legitimate explanation for the funds is created. This can involve wire transfers or shell companies in offshore havens. The second stage, “layering,” moves funds between multiple financial institutions to hide their source and ownership and to disguise the audit trail. The first stage, “placement,” entails disposal of the drug proceeds into domestic banks and foreign financial institutions. Though there are many ways to launder drug money, the process generally involves three basic stages.

financial system, according to the Financial Crimes Enforcement Network (FinCEN). In a May 1998 speech, President Clinton declared, “Up to $500 billion in criminal proceeds every single year-more than the GNP of most nations-is laundered, disguised as legitimate revenue, and much of it moves across our borders.” As much as $100 billion a year in drug trafficking cash moves through the U.S. In order to invest the profits of their illicit activities and avoid having their assets seized by the government, drug traffickers must transform the monetary proceeds from their criminal activity into revenue from apparently legal sources. The trade in illicit drugs is estimated to be worth $400 billion a year, and it accounts for 8% of all international trade, according to the United Nations.