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Indiaforensic > Education > Money Laundering


Combating the Peril of Money Laundering


If you were to conduct a survey in our country asking What is Money Laundering ?

The visualisation of the Lay man will not be far different than the one shown in this picture. The general guesses from most people would be that it must be something related to drying, washing or may be dry cleaning of the currency notes. This is rather the human tendency about the world's very big crime.

To some extent correct but layman don't know much of this world's third largest industry. As per IMF reports the turnover of this industry could be somewhere around $1.5 trillion. However common man does not pay attention because primarily it seems to be a victimless crime. It has none of the issues associated with a vanishing of the money from economy or performance of the government or organisations involved in the same and yet, money laundering can only take place after a predicate crime (such as a Drug trafficking or the stock market frauds)  has taken place.If the person on the street is the banker he might throw the three letters "KYC" to express his knowledge.  

Money laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source.

But in simple terms it is the Conversion of Black money into white money. This takes you back to cleaning the huge piles of cash. Indian newspapers frequently report the money laundering scams perpetrated by the Political leaders and some of the prominent stars are the chief ministers of UP, Punjab and Kerala. UP chief minister ms. Mayawati as per the Indian Express reports used some innovative techniques to launder the money by avoiding the tax in legitimate manner. She accepted the donations from persons who were road side heroes. When CBI raided these guys were found in no position to donate huge sums for political motives. 

Other Indian star in the laundering Business is Ketan Parekh.It is believed that he shifted the proceeds of money received from the BoI pay order scam to various tax heavens and ultimately in the Swiss Banks.These transactions are believd to be just the tip of the iceberg.

If done successfully, it allows the criminals to maintain control over their proceeds and ultimately to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions of the drug trafficker, the terrorist, the organised criminal, the insider dealer, the tax evader as well as the many others who need to avoid the kind of attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.

You may also:

  • If you are interested in taking up the courses offered by Indiaforensic on the subject of Money Laundering please click here
  • We have designed certification in Dodd Frank Act, kindly click here to try the mock test on Dodd Frank Act
  • Foreign Account Tax Control Act plays a significant role, if you would like to know more about the certifications offering in FATCA in India kindly click here to know more.


 

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Money Laundering Terms

 Case Study
In a small branch of big bank advances shot up 100% in a particular year. Loan portfolio contained bill discounted. The perpetrator of the fraud in collusion with the branch manager opened 36 different Inland Letter of Credit and Bill discounted. The bills were raised on one party by other and circular reference was never completed. Every company had different management but the fraud was unearthed when the Demand Draft of three parties was collected by a single person



 





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