LECTURE 6 Flashcards
(22 cards)
FINTRAC
Financial Transactions and Reports Centre of Canada - They facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities while protecting personal information under its control
Lenient Legislation of Canada
The risks of prosecution and imprisonment are lower than in other countries and many will take a plea bargain, meaning they will exchange information for a lower sentence
Lawyers and Money Laundering
in many cases, lawyers are unintentionally involved and unaware of the true purpose of the transaction - they are exempt from reporting suspicious behaviour related to money laundering as it violates solicitor-client confidentiality
Vespasian: “Pecunia non olet”
Money doesn’t stink - people will accept money no matter how it’s obtained
Origins of Money Laundering
Al Capone may have laundered some of his illicit alcohol profits through laundries in Chicago - Joseph “doc” Stacher, claimed the purpose of laundering was to wash it clean, to make the funds appear real
What is Money Laundering?
Any act or attempted act to disguise the source of money to assets derived from criminal activity - dirty money produced through criminal activity transformed into clean money
Four Stages of Money Laundering
(1) Placement
(2) Layering
(3) Integration
(4) Repatriation
Placement
Placing the proceeds of crime in the financial system
Layering
Converting the proceeds of crime into another form and creating complex layers of financial transactions to disguise the trail, sources and ownership of funds. May involve transactions such as buying and selling stocks, commodities or property
Integration
Placing laundering proceeds back into the economy creates the perception of legitimacy. This can include investments in legal business or purchasing assets like real estate
Repatriation
Returning money to its original criminal owners and making it available for use in further illegal activities
Terrorist Activity Financing
The provision or collection of funds, goods or services to support terrorist activities, where the primary motivation is not financial gain
Differences between Terrorist Activity Financing and Money Laundering
(1) The funds can be from legitimate sources, not just criminal acts
(2) The money is a means to an end - the ultimate goal is to use the funds to facilitate or carry out terrorist activities
Consensual Crimes
A crime with no direct victim because only consenting adults are involved (e.g., production and sale of illicit drugs)
Economics of Criminal Markets
Demand creates supply - sufficient demand for an illegal product or service creates a profitable opportunity for organized crime to supply that market on a commercial scale
Chinese “Flying Money”
A negotiable paper instrument - the name came from its ability to transfer cash across large distances without the actual movement of money
Hawala System
An informal funds transfer system that allows for the transfer of funds from one person to another without actual movement of money
Edwin Sutherland - Separation of Organized Crime
The mobsters are the real original criminals, but some businessmen and professionals commit crimes and are different entities. Criminals differ from those who assist them from outside in money laundering and evading law enforcement
Charbonneau Commission Inquiry
Investigated Mafia infiltration in the construction industry - the individuals implicated included politicians, bureaucrats, members of the Hell’s Angels, union leaders, the Rizzuto crime family, all major construction firms operating in Quebec, city engineers and civil servants
Iceland’s Approach to Money Laundering
They prosecuted bankers as criminals instead of imposing fines which allow chief executives to escape punishment
The Only Solution - Rethinking Organized Crime
Focusing on the amount of harm done rather than who did it, judging the impact not the identity, the extent of harm matters more than the perpetrator
Why is Corruption Key to the Sustainability of Organized Criminal Groups?
Corruption provides organized criminal groups with various advantages that contribute to their sustainability. They can evade prosecution, protect their interests and maintain operations over extended periods of time by infiltrating and co-opting institutions and individuals. Combating corruption is essential for practical efforts against organized crime and preserving the rule of law
