60 Best Money Laundering Research Papers, Books and web links.

60 BEST ANTI-MONEY LAUNDERING AND COUNTER TERRORISM FINANCING RESOURCES GLOBALLY

Research into money laundering goes deeper than reading ACAMS or Linkedin. Here we have provided links to the 60 Best Money Laundering Research Papers, books and web articles.

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Title & LinkAuthor & Link to BibliographyDescription
(scroll to left to read)
Money launderingM Levi, P Reuter – Crime and Justice, 2006 – journals.uchicago.eduTechniques for hiding proceeds of crime include transporting cash out of the country, purchasing businesses through which funds can be channeled, buying easily transportable valuables, transfer pricing, and using “underground banks.” Since the mid-1980s …
 Dirty money: The evolution of money laundering counter-measuresWC Gilmore – 1999 – ncjrs.govThe first chapter provides an overview of the problem, as it notes that estimates of money from criminal activities range from 300 to 500 billion US dollars annually, money that is available for laundering. Such quantities of money, often linked with organized crime …
How big is global money laundering?J Walker – Journal of Money Laundering Control, 1999 – emerald.comKnown incidents of money laundering involving large amounts of money generated from crime are of tremendous public interest and are consequently given wide publicity. A wide range of national and international agencies have attempted to quantify organised crime …
 Macroeconomic implications of money launderingPJ Quirk – Washington, Fondo Monetario Internacional, WP, 1996 – elibrary.imf.orgThis paper reviews the main analytical, empirical, and policy issues related to the macroeconomic implications of money laundering. The paper discusses, first, how money laundering can be measured, given that it is unobservable, and reports cross-section …
 Chasing dirty money: The fight against money launderingP Reuter – 2005 – books.google.comOriginally developed to reduce drug trafficking, efforts to combat money foundering have broadened over the years to address other crimes and, most recently, terrorism. In this study,[the authors] look at the scale and characteristics of money laundering, describe and …
 Money laundering: a new international law enforcement modelG Stessens – 2000 – books.google.comThis book gives a broad analysis of the legal issues raised by the international fight against money laundering. It offers an extensive comparative research of the criminal and preventive law aspects from an international perspective. Stessens portrays money laundering as a …
Money laundering: muddying the macroeconomyPJ Quirk – Finance and Development, 1997 – search.proquest.comIMF staff went to a small island country to assess economic developments. As they walked around the capital, they noticed a surprisingly large number of small banks (more than 100 in a country of less than 100,000 people). A year later, it was revealed that many of these …
Money laundering and its regulationM Levi – The Annals of the American Academy of Political …, 2002 – journals.sagepub.comThis article examines definitions of” money laundering” and the conceptual and actual role its regulation plays in dealing with drug markets. If laundering is prevented, incentives to become major criminals are diminished. It identifies and critiques three aspects of harm …
Money laundering: the economics of regulationD Masciandaro – European Journal of Law and Economics, 1999 – SpringerEconomic research has not yet systematically undertaken the analysis of the existing interactions between criminal economy and financial markets. The present work belongs to a research field increasingly interested in such issues and focuses on the economic analysis of money laundering …
Money laundering: some factsF Schneider, U Windischbauer – European Journal of Law and Economics, 2008 – SpringerThis paper tackles the quite difficult topic of money laundering. After defining money laundering, and after explaining the three stages (steps), placement, layering and integration, the paper tries a quantification and estimation of the volume and development of …
Money laundering and the international financial systemV Tanzi – 1996 – ideas.repec.orgThe IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues …
Measuring Global Money Laundering:” The Walker Gravity Model”J Walker, B Unger – Review of Law & Economics, 2009 – degruyter.comMeasuring global money laundering, the proceeds of transnational crime that are pumped through the financial system worldwide, is still in its infancy. Methods such as case studies, proxy variables, or models for measuring the shadow economy all tend to under-or …
Money laundering—a global obstacleB Buchanan – Research in International Business and Finance, 2004 – ElsevierOne of the biggest obstacles to maintaining an effective operating international financial system is money laundering. A global phenomenon and international challenge, money laundering is a financial crime that often involves a complex series of transactions and …
An inquiry into money laundering tools in the Bitcoin ecosystemM Möser, R Böhme, D Breuker – 2013 APWG eCrime …, 2013 – ieeexplore.ieee.orgWe provide a first systematic account of opportunities and limitations of anti-money laundering (AML) in Bitcoin, a decentralized cryptographic currency proliferating on the Internet. Our starting point is the observation that Bitcoin attracts criminal activity as many …
 Black finance: the economics of money launderingD Masciandaro, E Takats, B Unger – 2007 – books.google.com” The recent dramatic wave of terrorist attacks has further focussed worldwide attention on the money laundering phenomena. The objective of this book is to offer the first systematic analysis of the economics of money laundering and its connection with terrorism finance …
 Critical reflections on transnational organized crime, money laundering and corruptionME Beare – 2003 – books.google.comTransnational crime, organized crime, money laundering and corruption are four concepts that have gained and continue to gain an international and domestic profile. Is the information given to the public concerning these concepts distorted by the vested interests of …
 The amounts and the effects of money launderingB Unger, M Siegel, J Ferwerda, W de Kruijf… – Report for the Ministry of …, 2006 – ftm.nl0.4. The amount of money laundered is sizeable 0.5. Where is the criminal money being laundered and placed? 0.6. The Netherlands are a transit country of crime and criminal money 0.7. What are the effects of money laundering? 0.8. The long term dangers of money  …
The consequences of money laundering and financial crimeJ McDowell, G Novis – Economic Perspectives, 2001 – ncjrs.govMoney laundering is seen as critical to the effective operation of transnational and organized crime. However, money laundering effects a country’s economy, government, and social well-being. This article briefly reviewed both the economic and social costs of money laundering …
 Money laundering: A guide for criminal investigatorsJ Madinger – 2011 – books.google.comMany changes have occurred in the twenty-five years that have passed since the enactment of the Money Laundering Control Act of 1986. The law has been amended, new underlying crimes have been added, and court decisions have modified its scope. The Act remains an …
 The hawala alternative remittance system and its role in money launderingPM Jost, HS Sandhu – 2000 – peacepalacelibrary.nlThe components of hawala that distinguish it from other remittance systems are trust and the extensive use of connections such as family relationships or regional affiliations. Unlike traditional banking or even the’chop’system, hawala makes minimal (often no) use of any …
The fight against money launderingH Geiger, O Wuensch – Journal of Money Laundering Control, 2007 – emerald.comPurpose–To provide an economic view on the costs and benefits of anti‐money laundering (AML) efforts. Design/methodology/approach–Based on a international, comparative study conducted in Switzerland, Singapore and Germany, the authors outline the impact of AML …
Bitcoin and money laundering: mining for an effective solutionD Bryans – Ind. LJ, 2014 – HeinOnlineTechnology forges ahead at a rapid pace, whether we like it or not. Criminals recognize this inevitability and use technological improvements to advance their craft,’committing crimes from half a world away in real time. Meticulous criminals also use technological …
Corruption and money laundering: a symbiotic relationshipD Chaikin, J Sharman – 2009 – Springer
 Financial havens, banking secrecy and money-launderingJA Blum, M Levi, RT Naylor, P Williams – 1998 – amnet.co.ilThe major money laundering cases coming to light in recent years share a common feature: criminal organizations are making wide use of the opportunities offered by financial havens and offshore centres to launder criminal assets, thereby creating roadblocks to criminal …
A typological study on money launderingP He – Journal of Money Laundering Control, 2010 – emerald.comPurpose–The purpose of this paper is to make objective descriptions on various money‐laundering techniques and to put forward countermeasures in order to combat money laundering more effectively and efficiently. Design/methodology/approach–This paper …
 Reference guide to anti-money laundering and combating the financing of terrorismPA Schott – 2006 – elibrary.worldbank.orgThis second edition of the Reference Guide is a comprehensive source of practical information on how countries can fight money laundering and terrorist financing. Aimed at helping countries understand the new international standards, it discusses the problems …
 Money laundering policyPC Van Duyne – Fears and Facts, 2003 – petrusvanduyne.nlIt is difficult to argue about the nature of smells. Some of them do not even have names. But one kind of smell has certainly been nominated and changed in our appreciation: the ‘moral smell’of money. Today the adage ‘money does not smell’does not apply any more. Now we …
Responding to Money LaunderingE Savona – 2005 – books.google.comResponding to Money Laundering has its origin in the International Conference on Preventing and Controlling Money Laundering and the Use of Proceeds of Crime: A Global Approach organised by ISPAC, the International Scientific and Advisory Board of the United …
 Dirty money: the evolution of international measures to counter money laundering and the financing of terrorismWC Gilmore – 2004 – books.google.comThis is the third edition of this publication which explores key issues in the fast evolving field of money laundering and terrorist financing, and which has been restructured so as to fully reflect the high international priority given to tackling the financing of terrorism since …
Money laundering and globalizationP Alldridge – Journal of law and society, 2008 – Wiley Online LibraryThe article traces the various imperatives generated by the combination of the money laundering panic of the late 1990s with the advent of globalization. If there is to be an attempt legally to regulate laundering, it (laundering) must be a relatively serious offence …
Money launderingN Morris-Cotterill – Foreign Policy, 2001 – JSTORFrom Moscow to Buenos Aires, money laundering scandals sap economies and destabilize governments. Policymakers blame crime cartels, tax havens, and new techniques like cyberlaundering. But dirty money long predates such influences. Without unified rules …
The economics of crime and money laundering: does anti-money laundering policy reduce crime?J Ferwerda – Review of Law & Economics, 2009 – degruyter.comAnti-money laundering policy has become a major issue in the Western world, especially in the United States after 9-11. Basically, all countries in the world are more or less forced to cooperate in the global fight against money laundering. In this paper, the criminalization of …
 Dirty dealing: the untold truth about global money laundering, international crime and terrorismP Lilley – 2003 – books.google.comPraise and ReviewsEntertaining, well written and well presented.JOHN MULQUEEN, The Irish TimesPaints an alarming picture of the power and scale of todays crooked and corrupt financial world. Lilley has done his homework.THE IODS DIRECTOR MAGAZINESChoice of …
System and method for analyzing and dispositioning money laundering suspicious activity alertsBJ Kloostra, C Dalvi, BN Behm – US Patent App. 12/258,784, 2009 – Google PatentsA system and method for analyzing, dispositioning, recording, reviewing, and managing potentially suspicious financial transactions. In some cases, the system models the steps taken by a subject matter expert to reach a conclusion so that a novice can follow similar …
A theory of “Crying Wolf”: The economics of money laundering enforcementE Takáts – The Journal of Law, Economics, & Organization, 2011 – academic.oup.comThe article shows how excessive reporting, called “crying wolf”, can dilute the information value of reports and how more reports can mean less information. Excessive reporting is investigated by undertaking the first formal analysis of money laundering enforcement …
Power and discourse in policy diffusion: Anti-money laundering in developing statesJC Sharman – International Studies Quarterly, 2008 – academic.oup.comTwenty years ago not a single country had a policy against money laundering; currently, over 170 have very similar anti-money laundering (AML) policies in place. Why have so many countries with so little in common adopted the same policy so rapidly? This extensive …
 Global financial crime: terrorism, money laundering and offshore centresD Masciandaro – 2017 – books.google.comThe scope for financial crime has widened with the expansion and increased integration of financial markets. Money laundering, terrorism financing and tax crime have all changed in both nature and dimension. As new technologies reduce the importance of physical …
AI fights money launderingJ Kingdon – IEEE Intelligent Systems, 2004 – ieeexplore.ieee.orgThe bank had approached Searchspace, formed by re- searchers from the Intelligent Systems Lab at University College London in 1993. It applies adaptive and learning- systems approaches to a range of business and finance tasks. However, until then, we had principally developed …
 Transnational criminal organizations, cybercrime, and money laundering: a handbook for law enforcement officers, auditors, and financial investigatorsJR Richards – 1998 – books.google.comWRITTEN BY A LAW ENFORCEMENT PROFESSIONAL FOR OTHER LAW ENFORCEMENT PERSONNEL IN THE TRENCHES This book examines the workings of organized criminals and criminal groups that transcend national boundaries. Discussions …
Trade-based money laundering and terrorist financingJS Zdanowicz – Review of law & economics, 2009 – degruyter.comMoney laundering can be defined, generally, as the process of concealing the existence, illegal source, or application of income derived from a criminal activity, and the subsequent disguising of the source of that income to make it appear legitimate. Deception is the heart of …
The tenuous relationship between the fight against money laundering and the disruption of criminal financeMF Cuéllar – J. Crim. L. & Criminology, 2002 – HeinOnlineThis article examines the fight against money laundering as a case study of the separation between an enforcement system’s objectives and performance. To launder money is to hide its illegal origin. The fight against money laundering is supposed to disrupt laundering in its …
 Detecting money laundering and terrorist financing via data miningJS Zdanowicz – Communications of the ACM, 2004 – dl.acm.orgThe use of international trade to move money, undetected, from one country to another is one of the oldest techniques used to circumvent government scrutiny. Either overvaluing imports or undervaluing exports can achieve this transfer. If an imported prod- uct is overvalued, the foreign …
Money laundering regulation: the micro economicsD Masciandaro – Journal of Money Laundering Control, 1998 – emerald.comThe analysis of the interactions between the criminal economy and the financial markets has not yet been systematically studied by the economists. This study belongs to a current research interested in this area, ie the economic analysis of money laundering. The work is …
Money laundering: The crime of the’90sGR Strafer – Am. Crim. L. Rev., 1989 – HeinOnlineIn the Money Laundering Control Act of 1986,’codified at sections 1956 and 1957 of Title 18 of the United States Code, Congress for the first time attempted to define and prohibit a category of activity known colloquially as” money laundering.” During an election year frenzy …
Applying data mining in investigating money laundering crimesZ Zhang, JJ Salerno, PS Yu – Proceedings of the ninth ACM SIGKDD …, 2003 – dl.acm.orgIn this paper, we study the problem of applying data mining to facilitate the investigation of money laundering crimes (MLCs). We have identified a new paradigm of problems—that of automatic community generation based on uni-party data, the data in which there is no direct …
Turnover of organized crime and money laundering: some preliminary empirical findingsF Schneider – Public choice, 2010 – SpringerAfter a short literature review, the paper quantifies the turnover of organized crime with the help of a MIMIC estimation procedure for the years 1995 to 2006 for 20 highly developed OECD countries. The volume of turnover from organized crime was US-270billionintheyear1995forthese20OECDc …
Money laundering: an international challengeLA Barbot – Tul. J. Int’l & Comp. L., 1995 – HeinOnlineIn the words of South American drug barons,” dirty money is best passed through clean hands.” 1 Money laundering is often defined as” the process by which one conceals the existence, illegal source or illegal application of income, and then disguises that income to …
Money laundering and its regulationA Chong, F Lopez‐De‐Silanes – Economics & Politics, 2015 – Wiley Online LibraryThe recent wave of terrorist attacks has increased the attention to money laundering activities, and the role played by the regulatory frameworks controlling feeder activities. We investigate empirically the determinants of money laundering and its regulation in close to …
 Money laundering: a concise guide for all businessD Hopton – 2009 – books.google.comWorldwide, anti-money laundering regulations and legislation have become one of the weapons of choice of governments that are fighting global terrorism and criminality. In this updated edition of Money Laundering, Doug Hopton explains how The Money Laundering  …
Virtual money laundering: the case of Bitcoin and the Linden dollarR Stokes – Information & Communications Technology Law, 2012 – Taylor & FrancisThis paper presents an analysis of the money laundering risks of two virtual currencies, the Linden dollar, the in-world currency of the interactive online environment Second Life, and Bitcoin, an experimental virtual currency that allows for the transfer of value through peer-to …
 Anti-Money Laundering: international law and practiceWH Muller, CH Kalin, JG Goldsworth – 2007 – books.google.comAnti-Money Laundering is the definitive reference on money laundering and practice. First an outline will be given of the general approach taken by supra-national organisations like the United Nations and the European Council. Next the approach taken by international …
 Crime, illicit markets, and money launderingP Williams – Managing global issues: Lessons learned, 2001 – carnegieendowment.orgPhil Williams organized crime is perhaps best understood as the continuation of commerce by illegal means, with transnational criminal organizations as the illicit counterparts of multinational corporations. During the 1990s, transnational organized crime—and the …
 Criminal finance: The political economy of money laundering in a comparative legal contextK Hinterseer – 2002 – books.google.comLike it or not, money launderers are major players in the world’s economy. Their strategies constrain national economic policies and undermine financial institutions. With the advent of secure transfer technologies, and with the help of modern financial theories of derivatives …
A comparative guide to anti-money launderingM Pieth, G Aiolfi – 2004 – academia.eduMoney laundering is the process by which criminals attempt to conceal the source and ownership of the proceeds of their illicit activities; if successful, the criminal maintains control and access to these funds when and where he chooses. The efforts to combat this …
 Money launderingFAT Force – Policy Brief July 1999, 1999 – bahamasb2b.comThe goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to …
Money Laundering: The Scope of the Problem and Attempts to Combat ItS Sultzer – Tenn. L. Rev., 1995 – HeinOnlineMoney laundering is the process of taking the proceeds of criminalactivity and making it appear legal. Money laundering has been called the” lifeblood” of crime because, without cleansing the profits of crime, the criminal enterprise cannot flourish. While drug money  …
Money laundering law: Forfeiture, confiscation, civil recovery, criminal laundering and taxation of the proceeds of crimeP Alldridge – 2003 – Bloomsbury Publishing
Money laundering and financial means of organized crime: some preliminary empirical findingsF Schneider – Paolo Baffi Centre Research Paper, 2008 – papers.ssrn.comAfter giving a short literature review, the paper tries a quantification of the volume of money laundering activities, with the help of a DYMIMIC estimation procedure for the years 1995 to 2006 for 20 highly developed OECD countries. The volume of laundered money was 273 …
Money‐Laundering: Estimates in FogPC Van Duyne – Journal of Financial Crime, 1994 – emerald.comThe paper examines certain problems in determining the extent of money‐laundering. The author first discusses the methodological problems inherent in assessing its volume. He then discusses two methods to estimate the extent of money‐laundering. One method is …

AML-Resources U to Z

AML Resources U to Z

A to EF to JK to OP to TU to Z

Bring yourself up to date with this useful list of AML resources and help documents. We design training packages for your staff, the below is just a small section of our knowledge base. It is important to consider your requirement for bespoke training aligned to your risk.

See our training page to book some training

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  • United Nations Convention Against Corruption
  • United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances
  • United Nations Convention for the Suppression of the Financing of Terrorism
  • United Nations Convention Against Transnational Organised Crime and the Protocols.

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  • SEC Rules on Whistle-blowing
  • Wolfsberg Private Banking Principles. – The Principles were initially formulated in 2000 (and revised in 2002) to take into account certain perceived risks associated with private banking. Such risks continue to warrant appropriate levels of attention, no less today than ten years ago. Regulators continue to expect strong anti-money laundering standards, robust controls, enhanced client due diligence and suitable AML policies and procedures. The Wolfsberg Principles detail the groups considerations. –
  • Wolfsberg Guidance on Sanction Screening

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A to EF to JK to OP to TU to Z

AML-Resources K to O

AML Resources K to O

A to EF to JK to OP to TU to Z

Bring yourself up to date with this useful list of AML resources and help documents. We design training packages for your staff, the below is just a small section of our knowledge base. It is important to consider your requirement for bespoke training aligned to your risk.

See our training page to book some training

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L

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  • New Zealand – Audit of AML/CTF programs and risk assessments

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  • OECD – Standard for Automatic Exchange of Financial Account Information in Tax Matters
  • Organised Crime – United Nations Convention Against Transnational Organised Crime and the Protocols.-

A to EF to JK to OP to TU to Z

AML-Resources F to J

AML Resources F to J

A to EF to JK to OP to TU to Z

Bring yourself up to date with this useful list of AML resources and help documents. We design training packages for your staff, the below is just a small section of our knowledge base. It is important to consider your requirement for bespoke training aligned to your risk.

See our training page to book some training

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G

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A to EF to JK to OP to TU to Z

AML-Resources P to T

AML Resources P to T

A to EF to JK to OP to TU to Z

Bring yourself up to date with this useful list of AML resources and help documents. We design training packages for your staff, the below is just a small section of our knowledge base. It is important to consider your requirement for bespoke training aligned to your risk.

See our training page to book some training

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  • PEPs. FATF guidance on PEPs –
  • POLICY – An Anti-Money Laundering and Terrorist Financing Policy is the document that guides all AML activity and helps your organization guide staff. It is a critical document that should detail a lead from the top of the organization. Below we provide three institutional policies for you to peruse contrast and compare (the first is a Real Estate policy, the second/third are banking policies) . We make no comment on the quality. We provide this service for you to reassure you, your policy will meet the required regulatory rigour.
  • AML/CTF Policies and Procedures template – Seek our advice before using this. –

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  • Real Estate Policy Template. NB: Seek advice this is a guide only.
  • Risk Assesment and AML/CTF program audits – New Zealand
  • Risk Assessment – BSA/AML Example – for a bank. We do not warrant the quality of this document. –

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  • Securities Exchange Commission Rules on Whistle-blowing
  • Guidance on Sanction Screening from Wolfsberg –

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  • Standard for Automatic Exchange of Financial Account Information in Tax Matters OECD
  • Template for AML program for a small firm – US centric NB- We do not warrant the quality of this document. You must seek our advice.
  • Template for AML/CTF Policies and Procedures – Seek our advice before using this. –
  • Template for Real Estate AML/CTF Policy. NB: Seek our advice this is a guide only.
  • Terrorism. United Nations Convention for the Suppression of the Financing of Terrorism –
  • Transparency International Exporting Corruption Report
  • Company Trusts. FATF guidance on Company formation agents and Trusts – A risk based approach to their work and the risk they face in the climate to remove hidden Beneficial Ownership. For a summary and the full report go here, or download the full report.

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My Wife Thinks White Collar Crime is Acceptable, Do You? – A debate.

Greed is good

I was a police officer and detective rising to DI (captain in the US) for 26 years.

I’m a fairly hard nosed detective that doesn’t give much quarter to a criminal. I’ve dealt with quite possibly all types of major crime in one guise or another.

My wife is an altogether different animal. She is also a detective. She works in Child Protection dealing with the most depraved abuse one can imagine. She is even more hard nosed than me. Definitely no quarter!

We had a discussion this morning about white collar crime and my wife’s reaction was to shrug her shoulders and say “Oh well, it doesn’t really matter does it”.

I nearly fell off my chair.

I compared with her an executive criminal to a burglar. Now don’t get me wrong, I don’t like burglars. But it seems to me, from my experience, society condemns them without a side-ways glance. It is completely unacceptable behaviour to break into someone’s home and steal from them. I would say the average burglar is maybe stealing around $2,000 to $10,000 worth of goods from a home. Of course they violate the home so that’s the really bad bit – not the property value.

Yet they’ll sell those goods for no more than a couple of hundred dollars/pounds.

They steal to live. Burglars are in the main from the bottom of the societal feeding pool. Usually un-employed, mostly with a habit to feed and definitely with no food in the cupboards at home. Those with a family still need to feed them. Yet my wife would say, it’s a personal choice to take drugs. Everyone knows the risks when they first do it and everyone knows how it’s going to turn out. And in that statement she writes off the entire population of burglars.

Now let’s turn to white collar criminals – and yes I do call them criminals.

One of the things that repeatedly concerned me in the police was the chasing of ‘easy prey’. The down-trodden. The ill-educated. The poor. I don’t have the statistics but I do have experience, and that experience tells me the average prisoner filtering through a police detention centre is below average intelligence, below average economically and below average health. I’m not here to sort out society.

But I am here to espouse equity.

Those that commit crime above the bottom tier are less likely to get caught. Not because they’re better at it but because the police don’t put resource into it. The police have access to a huge range of resource both technical and human. 90% of it is chasing burglars and their associate criminals. The rest is doing back office function. I say this having come through different periods of policing ‘style’. ‘Performance driven’ – that really does chase the down-trodden and the clear up rate becomes nirvana. ‘Austerity’, where no one was chased and virtually all specialist crime resource was reduced to skeleton provision – no-one chasing the white collar criminal then.

We have a post on this website about crime prevention. A large part of the theory and practice covered in it relates to the risk matrix facing any criminal. How raising the risk to them when committing a crime makes them think really carefully before committing it. For a burglar, he isn’t so easy displaced because they are stealing to live and have little to lose. But an executive? They have the lovely house in the Hamptons and little Rebecca’s bought education to fund – so they do have a lot to lose.

The theory goes that raising the risk will put them off committing the crime.

The average white collar criminal, even when caught, generally isn’t prosecuted. There’s usually a deal done somewhere down the line. The recent tax evasion scandal with Bank Hapoalim is a case in point. This case saw the bank hide nearly $8 billion from the US treasury in offshore accounts. They deliberately hid the accounts in false names and other tactics to help US wealthy citizens evade their tax.

The executive team at the bank knew this was endemic and yet authorised/approved of its use. The investigation has taken several years and I am not privy to what deals were done but it appears the entire executive team were let go and a new team put in place. Once that transition was made the bank started to co-operate with the US authorities and the rest is history.

Yet not a single executive is facing any charge for conspiracy to defraud the US. Even if a prosecution isn’t criminal, why no civil pursuit?

If we compare these individuals to the burglar.

  • They are wealthy
  • They have taken performance related bonuses
  • They are acting in full knowledge.
  • They have no need to steal to survive.

Yet they face no punishment?

At a time when the human race is facing the most significant threat in living memory, we need every tax dollar we can get our hands on. We need to properly resource hospitals and their staff. We need to provide full protective equipment to all front-line workers.

All of this money comes from people paying their taxes. It isn’t a choice. It’s a duty.

Yet society seems to accept white collar crime with a shrug of its shoulders and a ‘well why wouldn’t they’, passing comment.

I’m kind of hopeful that something good is going to come from COVID 19. Something that changes the way we live for the better. Not chasing the next car, or the bigger house, not polluting our air but recognising when we have all we need and society can function the way, morally at least, it should. But I fear that is looking at the world through rose tinted glasses. I fear we will simply return, when the lock-down is gone, to exactly the same process of greed is good. Because executive white collar crime is exactly that.

GREED

HOW BANK HAPOALIM CONSPIRED WITH US CITIZENS TO HIDE $7.6 BILLION FROM THE IRS

Bank Hapoalim Tax evasion Scandal

Hiding US citizen cash in offshore accounts is uncovered and punished.

Israel’s Largest Bank, Bank Hapoalim, has admitted to conspiring with US taxpayers to hide $7.6 billion and has agreed a fine of $875 million for its sins.


Bank Hapoalim (Switzerland) and Bank Hapoalim B.M. (Israel) agree to pay nearly $875 Million and an entry of criminal charges against Bank Hapoalim B.M. for conspiring with U.S. taxpayers and others to hide more than $7.6 billion in more than 5,500 secret Swiss and Israeli bank accounts and the income generated in these accounts from the Internal Revenue Service (IRS).

The money will be paid to the U.S. Treasury, the Federal Reserve, and the New York State Department of Financial Services. It is the second-largest recovery by the DOJ in connection with its investigations into offshore U.S. tax evasion by foreign banks.

Manhattan U.S. Attorney Geoffrey S. Berman said:

“Israel’s largest bank, Bank Hapoalim, and its Swiss subsidiary have admitted to not only failing to prevent but to actively assisting U.S. customers to set up secret accounts, to shelter assets and income, and to evade taxes. The combined payment approaching $1 billion reflects the magnitude of the tax evasion by the Bank’s U.S. customers, the size of the fees the Bank collected to provide this illegal service, and the gravity of the illegal conduct.”

Principal Deputy Assistant Attorney General Richard E. Zuckerman said:

“The Department of Justice continues to aggressively prosecute banks and other financial institutions that help U.S. taxpayers conceal their income and assets in offshore bank accounts. Today, Bank Hapoalim is being held accountable for its conduct – it has admitted to its crimes and will surrender all fees it earned, repay the United States for lost tax revenue, and pay a substantial fine.”

IRS-CI Chief Don Fort said:

“Offshore tax evasion is a top priority for IRS Criminal Investigation and we are wholeheartedly committed to bringing offenders to justice. Today’s resolution serves as proof that financial institutions engaging in tax fraud face dire criminal and financial consequences for their behavior.”

BHBM and BHS have agreed to fully cooperate with further investigations into hidden bank accounts. Assuming BHBM’s continued compliance with its agreement to identify hidden accounts, the US Government has agreed to defer prosecution of BHBM for a period of three years, after which time the charge against BHBM will be dismissed.

BHBM is Israel’s largest bank and operates primarily as a retail bank with approximately 250 branches throughout Israel and more than 2.5 million accounts.

In addition to retail banking services, BHBM offered private banking services for onshore and offshore customers through its retail branches and its Global Private Banking Centre.

BHBM also wholly owned Poalim Trust Services Ltd. (BVI entity), which provided trust formation and management services. Outside Israel, BHBM owned BHS, a Swiss subsidiary that provided private banking. BHS is headquartered in Zurich and at times during the prosecution period had branches in Geneva, Luxembourg, and Singapore.

BHBM also had branches in New York, Miami, the Cayman Islands, the United Kingdom, and Jersey. It is likely investigations into entities in those jurisdictions will/are being conducted.

From at least in or around 2002, and continuing until at least 2014, the Bank conspired with employees, U.S. customers, and others to:

(1) defraud the United States with respect to taxes;

(2) file false federal tax returns; and

(3) commit tax evasion.

Employees of BHBM and BHS assisted U.S. customers in concealing their ownership and control of assets and funds held at the Bank, which enabled those U.S. customers to evade their U.S. tax obligations, by engaging in the following conduct:

  • Assisting U.S. customers with opening and maintaining accounts in the names of pseudonyms, code names, trust accounts, and offshore nominee entities;
  • Opening customer accounts for known U.S. customers using non-U.S. forms of identification;
  • Enabling U.S. taxpayers to evade U.S reporting requirements on securities’ earnings in violation of the Bank’s agreements with the IRS;
  • Providing “hold mail” services for a fee, avoiding any correspondence regarding the undeclared account being sent to the U.S.;
  • Offering back-to-back loans for U.S. taxpayers to enable them to access funds in the United States that were held in offshore accounts at the Bank in Switzerland and Israel; and
  • Processing wire transfers or issuing checks in amounts of less than $10,000 that were drawn on the accounts of U.S. taxpayers or entities in order to avoid triggering scrutiny.

At least four senior executives of the Bank, including two former members of BHS’s board of directors, were directly involved in aiding and abetting tax evasion of U.S. taxpayers.

The Bank is now required to cooperate fully with ongoing investigations and affirmatively disclose any information it may later uncover regarding U.S. accounts. The Bank is also required to disclose information consistent with the Department of Justice’s Swiss Bank Program relating to accounts closed between Jan. 1, 2009, and Dec. 31, 2019. The agreements provide no protection from criminal or civil prosecution for any individuals. A worrying three years for anyone who was involved in this as the US authorities seek to recover taxes and prosecute those evading tax.

Both the penalty and fine amounts for BHBM take into consideration that the Bank, after initially providing deficient cooperation through an inadequate internal investigation and the provision of incomplete and inaccurate information and data to the US Government, thereafter conducted a thorough internal investigation, provided client-identifying information, and cooperated in ongoing investigations and prosecutions.

The Bank further implemented remedial measures to protect against the use of its services for tax evasion in the future.

The time it took to complete this investigation allowed the executives at the helm of the bank and aware of this scandal to avoid prosecution, something that has to change to motivate executives to ensure proper processes and to prevent criminality.

How To Assess and Manage Risk with Wealth Management

Wealth Management

Guidelines to manage risk within wealth management

Wealth management is the provision of banking and other financial services to high-net- worth individuals and their families or businesses. It is also known as private banking. Clients of wealth management firms can expect dedicated relationship management staff to provide tailored services covering, for example, banking (e.g. current accounts, mortgages and foreign exchange), investment management and advice, fiduciary services, safe custody, insurance, family office services, tax and estate planning and associated facilities, including legal support.

Many of the features typically associated with wealth management, such as wealthy and influential clients; very high-value transactions and portfolios; complex products and services, including tailored investment products; and an expectation of confidentiality and discretion are indicative of a higher risk for money laundering relative to those typically present in retail banking. Wealth management firms’ services may be particularly vulnerable to abuse by clients who wish to conceal the origins of their funds or, for example, evade tax in their home jurisdiction.

Firms in this sector should consider the following risk factors and measures alongside those set out in our general post on Risk Management.

Risk factors
Product, service and transaction risk factors

The following factors may contribute to increasing risk:

  • Customers requesting large amounts of cash or other physical stores of value such as precious metals;
  • Very high-value transactions;
  • Financial arrangements involving jurisdictions associated with higher ML/TF risk (firms should pay particular attention to countries that have a culture of banking secrecy or that do not comply with international tax transparency standards);
  • Lending (including mortgages) secured against the value of assets in other jurisdictions, particularly countries where it is difficult to ascertain whether the customer has legitimate title to the collateral, or where the identities of parties guaranteeing the loan are hard to verify;
  • The use of complex business structures such as trusts and private investment vehicles, particularly where the identity of the ultimate beneficial owner may be unclear;
  • Business taking place across multiple countries, particularly where it involves multiple providers of financial services;
  • Cross-border arrangements where assets are deposited or managed in another financial institution, either of the same financial group or outside of the group, particularly where the other financial institution is based in a jurisdiction associated with higher ML/TF risk. Firms should pay particular attention to jurisdictions with higher levels of predicate offences, a weak AML/CFT regime or weak tax transparency standards.

Customer risk factors

The following factors may contribute to increasing risk:

  • Customers with income and/or wealth from high-risk sectors such as arms, the extractive industries, construction, gambling or private military contractors.
  • Customers about whom credible allegations of wrongdoing have been made.
  • Customers who expect unusually high levels of confidentiality or discretion.
  • Customers whose spending or transactional behaviour makes it difficult to establish ‘normal’, or expected patterns of behaviour.
  • Very wealthy and influential clients, including customers with a high public profile, non-resident customers and PEPs. Where a customer or a customer’s beneficial owner is a PEP, firms must always apply EDD in line with Articles 18 to 22 of Directive (EU) 2015/849.
  • The customer requests that the firm facilitates the customer being provided with a product or service by a third party without a clear business or economic rationale.

Country or geographical risk factors

The following factors may contribute to increasing risk:

  • Business is conducted in countries that have a culture of banking secrecy or do not comply with international tax transparency standards.
  • The customer lives in, or their funds derive from activity in, a jurisdiction associated with higher ML/TF risk.

Measures

The staff member managing a wealth management firm’s relationship with a customer (the relationship manager) should play a key role in assessing risk. The relationship manager’s close contact with the customer will facilitate the collection of information that allows a fuller picture of the purpose and nature of the customer’s business to be formed (e.g. an understanding of the client’s source of wealth, why complex or unusual arrangements may nonetheless be genuine and legitimate, or why extra security may be appropriate). This close contact may, however, also lead to conflicts of interest if the relationship manager becomes too close to the customer, to the detriment of the firm’s efforts to manage the risk of financial crime.

Consequently, independent oversight of risk assessment will also be appropriate, provided by, for example, the compliance department and senior management. It is particularly prudent to thoroughly ensure outsourced Compliance firms are well trained and up to date with current regulations, processes and practices – especially where they have a relationship with the relationship manager and no contact with the client.

Enhanced customer due diligence

The following EDD measures may be appropriate in high-risk situations:

  • Obtaining and verifying more information about clients than in standard risk situations and reviewing and updating this information both on a regular basis and when prompted by material changes to a client’s profile. Firms should perform reviews on a risk-sensitive basis, reviewing higher risk clients at least annually but more frequently if risk dictates. These procedures may include those for recording any visits to clients’ premises, whether at their home or business, including any changes to client profile or other information that may affect risk assessment that these visits prompt.
  • Establishing the source of wealth and funds; where the risk is particularly high and/or where the firm has doubts about the legitimate origin of the funds, verifying the source of wealth and funds may be the only adequate risk mitigation tool. The source of funds or wealth can be verified, by reference to, inter alia:
    • An original or certified copy of a recent pay slip;
    • Written confirmation of annual salary signed by an employer;
    • An original or certified copy of contract of sale of, for example, investments or a company;
    • Written confirmation of sale signed by an advocate or solicitor;
    • An original or certified copy of a will or grant of probate;
    • Written confirmation of inheritance signed by an advocate, solicitor, trustee or executor;
    • An internet search of a company registry to confirm the sale of a company.
  • Establishing the destination of funds.
  • Performing greater levels of scrutiny and due diligence on business relationships than would be typical in mainstream financial service provision, such as in retail banking or investment management.
  • Carrying out an independent internal review and, where appropriate, seeking senior management approval of new clients and existing clients on a risk-sensitive basis.
  • Monitoring transactions on an ongoing basis, including, where necessary, reviewing each transaction as it occurs, to detect unusual or suspicious activity. This may include measures to determine whether any of the following are out of line with the business risk profile:
    • Transfers (of cash, investments or other assets);
    • The use of wire transfers;
    • Significant changes in activity;
    • Transactions involving jurisdictions associated with higher ML/TF risk.
  • Monitoring measures may include the use of thresholds, and an appropriate review process by which unusual behaviours are promptly reviewed by relationship management staff or (at certain thresholds) the compliance functions or senior management.
  • Monitoring public reports or other sources of intelligence to identify information that relates to clients or to their known associates, businesses to which they are connected, potential corporate acquisition targets or third party beneficiaries to whom the client makes payments.
  • Ensuring that cash or other physical stores of value (e.g. travellers’ cheques) are handled only at bank counters, and never by relationship managers.
  • Ensuring that the firm is satisfied that a client’s use of complex business structures such as trusts and private investment vehicles is for legitimate and genuine purposes, and that the identity of the ultimate beneficial owner is understood.

Simplified customer due diligence

Simplified due diligence is not appropriate in a wealth management context.

What is a Politically Exposed Person?

What is a Politically Exposed Person?

What is a politically exposed person
What is a politically exposed person

This post will give a definition for a PEP and answer what is a politically exposed person. It also provides details of red flags that indicate a PEP is acting criminally. There is also a detailed guide from FATF.

PEPs are governed by the recommendations of FATF, recommendations 12 and 22 specifically.

FATF recommend enhancing due diligence when dealing with a PEP in financial transactions or account dealing.

An individual is a PEP if he is or has been entrusted with a prominent function. Many PEPs hold political positions that can be abused for the purpose of laundering stolen funds or other predicate offences such as corruption or bribery. A PEP includes politicians/councillors, senior police, business and military people. Checks with the relatives and associates of PEPs is also recommended to prevent second person related offences.

Because of the risks associated with Politically exposed people, FATF recommends additional Anti-Money Laundering or Counter Financing of Terrorism measures with PEPs. The measures are to prevent offences not criminalise PEPs specifically.

It is a fundamental principle of managing PEPs that institutes know who their customers are. Institutes need data to identify PEPs, be they domestic or foreign. Intelligence systems exist globally to help identify who is and who is not a PEP. However, these databases are not sufficient to comply with the PEPs requirements.

Institutes should find ways to share data throughout the industry to help identify customers as they conduct business with the institute.

The below list identifies many of the ‘red flags‘ that indicate a PEP is abusing their position of trust.

Politically Exposed Persons – Red Flags

  1. The determination that a customer is a PEP is not an aim in itself but forms part of the process that enables financial institutions and DNFBPs to assess the different types of higher risks related to PEPs. Determining that a customer is a PEP does not absolve financial institutions and DNFBPs of further ongoing due diligence specifically tailored to the fact that the client is a PEP.
    Being a PEP does not prejudge a link to criminal activities, or equate to being a criminal and / or subsequent abuse of the financial system. Similarly, the fact that a person is a domestic/international organisation PEP does not automatically imply that he/she poses a higher risk. Financial institutions and DNFBPs need nevertheless to be aware of the risks that a PEP may abuse the financial system to launder illicit proceeds, and financial institutions and DNFBPs need to be aware of the red flags / indicators that can be used to detect such abuse.
  2. The list of red flags below is relevant to detect those PEPs that abuse the financial system, and does not intend to stigmatize all PEPs.
  3. PEP red flags are not an exhaustive list and are complementary to the usual ML red flags that a reporting entity may be using. The methods of those PEPs that engage in illicit activity change and therefore indicators of their activity will do so as well. Also, there may be other red flags that should be considered as equally important in a particular country or region.

Detecting Misuse of the financial system by PEPS – Red Flags and Indicators for suspicion.

A. PEPS ATTEMPTING TO SHIELD THEIR IDENTITY:

PEPs are aware that their status as a PEP may facilitate the detection of their illicit behaviour. This means that PEPs may attempt to shield their identity, to prevent detection. Examples of ways in which this is done are:

  • Use of corporate vehicles (legal entities and legal arrangements) to obscure the beneficial owner.
  • Use of corporate vehicles without valid business reason.
  • Use of intermediaries when this does not match with normal business practices or when this seems to be used to shield identity of PEP.
  • Use of family members or close associates as legal owner.

B. RED FLAGS AND INDICATORS RELATING TO THE PEP AND HIS BEHAVIOUR:

  • Use of corporate vehicles (legal entities and legal arrangements) to obscure i) ownership, ii) involved industries or iii) countries.
  • The PEP makes inquiries about the institution’s AML policy or PEP policy.
  • The PEP seems generally uncomfortable to provide information about source of wealth or source of funds.
  • The information that is provided by the PEP is inconsistent with other (publicly available) information, such as asset declarations and published official salaries.
  • The PEP is unable or reluctant to explain the reason for doing business in the country of the financial institution or DNFBP.
  • The PEP provides inaccurate or incomplete information.
  • The PEPs seeks to make use of the services of a financial institution or DNFBP that would normally not cater to foreign or high value clients.
  • Funds are repeatedly moved to and from countries to which the PEPs does not seem to have ties with.
  • The PEP is or has been denied entry to the country (visa denial).
  • The PEP is from a country that prohibits or restricts its citizens to hold accounts or own certain property in a foreign country.

C. THE PEP’S POSITION OR INVOLVEMENT IN BUSINESSES:

The position that a PEP holds and the manner in which the PEP presents his/her position are important factors to be taken into account. Possible red flags are:

  • The PEP has a substantial authority over or access to state assets and funds, policies and operations.
  • The PEP has control over regulatory approvals, including awarding licences and concessions.
  • The PEP has the formal or informal ability to control mechanisms established to prevent and detected ML/TF.
  • The PEP (actively) downplays importance of his/her public function, or the public function s/he is relates to associated with.
  • The PEP does not reveal all positions (including those that are ex officio).
  • The PEP has access to, control or influence over, government or corporate accounts.
  • The PEP (partially) owns or controls financial institutions or DNFBPs, either privately, or ex officio.
  • The PEP (partially) owns or controls the financial institution or DNFBP (either privately or ex officio) that is a counter part or a correspondent in a transaction.
  • The PEP is a director or beneficial owner of a legal entity that is a client of a financial institution or a DNFBP.

D. RED FLAGS AND INDICATORS RELATING TO THE INDUSTRY/SECTOR WITH WHICH THE PEP IS INVOLVED:

A connection with a high risk industry may raise the risk of doing business with a PEP. Under FATF Recommendation 1, competent authorities, financial institutions and DNFBPs are required for determining which types of clients may be higher risk. For this, financial institutions and DNFBPs will also be guided by national guidance or risk assessments. Which industries may be at risk depends on the risk assessments and varies from country to country, and on other industry safeguards that may be in place. Examples of higher risk industries are:

  • Arms trade and defence industry.
  • Banking and finance.
  • Businesses active in government procurement, i.e., those whose business is selling to government or state agencies.
  • Construction and (large) infrastructure.
  • Development and other types of assistance.
  • Human health activities.
  • Mining and extraction.
  • Privatisation.
  • Provision of public goods, utilities.

E. BUSINESS RELATIONSHIP / TRANSACTION, PURPOSE OF BUSINESS RELATIONSHIP:

Red flag and indicators can also relate to the specific business relationship or transaction:

  • Multiple STRs (sometimes called a SAR) have been submitted on a PEP.
  • (Consistent) use of rounded amounts, where this cannot be explained by the expected business.
  • Deposit or withdrawal of large amounts of cash from an account, use of bank cheques or other bearer instruments to make large payments. Use of large amounts of cash in the business relationship.
  • Other financial institutions and DNFBPs have terminated the business relationship with the PEP.
  • Other financial institutions and DNFBPs have been subject to regulatory actions over doing business with the PEP.
  • Personal and business related money flows are difficult to distinguish from each other.
  • Financial activity is inconsistent with legitimate or expected activity, funds are moved to or from an account or between financial institutions without a business rationale.
  • The account shows substantial activity after a dormant period; or over a relatively short time; or shortly after commencing the business relationship.
  • The account shows substantial flow of cash or wire transfers into or out of the account.
  • Transactions between non-client corporate vehicles and the PEP’s accounts.
  • A PEP is unable or reluctant to provide details or credible explanations for establishing a business relationship, opening an account or conducting transactions.
  • A PEP receives large international funds transfers to a gaming account. The PEP withdraws a small amount for gaming purposes and withdraws the balance by way of cheque.
  • A PEP uses third parties to exchange gaming chips for cash and vice versa with little or minimal gaming activity.
  • A PEP uses multiple bank accounts for no apparent commercial or other reason.

F. PRODUCTS, SERVICE, TRANSACTION OR DELIVERY CHANNELS:

The FATF Recommendations contain examples of products, industries, service, transaction or delivery channels, which are of a higher risk, irrespective of the type of customer. These examples are:

  • Private banking.
  • Anonymous transactions (including cash).
  • Non-face-to-face business relationships or transactions.
  • Payments received from unknown or un-associated third parties.

If these industries, products, service, transaction or delivery channels are used by PEPs, then this adds an additional risk factor (depending on the nature of the PEP). In addition to the examples already listed in the FATF Recommendations, there are other products, industries, service, transaction or delivery channels that can become additionally vulnerable when used by PEPs.
Examples of these are:

  • Businesses that cater mainly to (high value) foreign clients.
  • Trust and company service providers.
  • Wire transfers, to and from a PEP account that cannot be economically explained, or that lack relevant originator or beneficiary information.
  • Correspondent and concentration accounts.
  • Dealers in precious metals and precious stones, or other luxurious goods.
  • Dealers in luxurious transport vehicles (such as cars, sports cars, ships, helicopters and planes).
  • High end real estate dealers.

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G. COUNTRY SPECIFIC RED FLAGS AND INDICATORS

The FATF Recommendations contain examples of higher risk country or geographic risk factors, irrespective of the type of customer. Additionally, the following red flags and indicators relating to countries can be taken into account when doing business with a PEP:

  • The foreign or domestic PEP is from a higher risk country.
  • Additional risks occur if a foreign or domestic PEP from a higher risk country would in his/her position have control or influence over decisions that would effectively address identified shortcomings in the AML/CFT system.
  • Foreign or domestic PEPs from countries identified by credible sources as having a high risk of corruption.
  • Foreign or domestic PEPs from countries that have not signed or ratified or have not or insufficiently implemented relevant anti-corruption conventions, such as the UNCAC, and the OECD Anti-Bribery Convention.
  • Foreign or domestic PEPs from countries with a mono economies (economic dependency on one or a few export products), especially if export control or licensing measures have been put in place.
  • Foreign or domestic PEPs from countries that are dependent on the export of illicit goods, such as drugs.
  • Foreign or domestic PEPs from countries (including political subdivisions) with political systems that are based on personal rule, autocratic regimes, or countries where a major objective is to enrich those in power, and countries with high level of patronage appointments.
  • Foreign or domestic PEPs from countries with poor and/or opaque governance and accountability.
  • Foreign or domestic PEPs from countries identified by credible sources as having high levels of (organised) crime.

If you need to train your staff on recognising a PEP or putting measures in place to mitigate risk, contact us to provide you with a bespoke training package.

What is Tax Evasion?

What is Tax Evasion?

Tax evasion can be conducted through many methods. It is sometimes confused with tax avoidance, which is not illegal. In this article we will identify what is tax evasion and where it is conducted globally.

What is the penalty for tax evasion?

The penalty for tax evasion can be severe. It can range from significant fines to sentences for jail time. See some of the more serious convictions in the table below.

CountryMax FineMax SentenceCase Example
United States$250,00010 YearsJack Abramoff
United KingdomUnlimited7 Years Abul Kalam Muhammad
Australia10 YearsFanny Beerepoot
Greece20 YearsSee the Lagarde List
Germany10% of evasion10 YearsUli Hoeness
France3 Million Euros7 YearsPatrick Balcony
Spain5 YearsRicardo Cavalho
Italy6 YearsSilvio Berlusconi
Russia10 YearsPlaton Lebedev

In Greece we couldn’t find a conviction for tax evasion which demonstrates why the nation suffered significantly in the 2008 financial crash. They just don’t pay tax in Greece! The Lagrade list controversially identified several Greeks ‘hiding’ money in Swiss bank accounts but despite this being in the hands of authorities since 2009, still no one has been convicted.

The fines possible range from a set maximum to percentages of the total evaded going up as the amount increases. Then of course there are back taxes to pay.

In the United States the IRS pay significant rewards to whistle-blowers for reporting tax evasion. The whistle-blower doesn’t need to be a US citizen to get rewarded, just support the case in a substantial way leading to tax recovery. The biggest whistle-blowing reward in the US is $56 million to a single whistle-blower.

If you know of a Tax evasion/Fraudster contact us via our military grade encrypted messaging system. You can report anonymously. We provide you with an Attorney.

In September 2017, HMRC received a boost to its criminal powers following the introduction of the failure to prevent the facilitation of tax evasion offences under the Criminal Finances Act 2017.

How much is evaded in tax each year?

HMRC estimated that in the 2016-2017 tax year the total cost of tax evasion in the UK was as much as £5.3 billion.

In the US the IRS claim between 2008 and 2010 $458 billion was evaded in taxes.

What is the difference between tax evasion and tax avoidance?

While tax evasion involves an individual or business deliberately subverting the tax system and is criminal, tax avoidance involves using the tax laws to your benefit. Arranging your finances in a way that reduces the amount of tax paid but in a way that is arguably lawful is common among the wealthy and seen as good practice.

Tax evasion usually carries with it a heavy maximum penalty and/or an unlimited fine, it is rarely taken lightly.

There are also tax avoidance schemes that exist that encourage people to make complex transactions that will ultimately save them money on tax. These are ‘too good to be true’ and will end up costing the tax-dodger more in the long run. It will also end them up in jail if enough is evaded.

Here are some methods of evading tax.

  • Hide wealth offshore in privacy locations.
  • Hide personal assets in a company (planes, property and yachts)
  • Incorporate businesses in offshore tax havens
  • Put your money in trusts
  • Utilise nominee directors of companies
  • Avoid beneficial ownership rules
  • Accept payments in cash
  • Invest in cash intensive business and clean it through the dark web
  • Structure your finances offshore
  • Utilise a law firm who will claim client confidentiality/privilege.
  • Under report income
  • Under or Over invoice
  • Get paid offshore and take a loan as a salary
  • Set up cross border complex transactions
  • Clean your money through a bitcoin tumbler
  • Claiming personal expense as business
  • Keeping two sets of books
  • Engaging in sham transactios

What is Cheating the Public Revenue?

Due to the serious nature of the crime, the maximum sentence for cheating public revenue in the UK is life in prison or an unlimited fine. It relates to any activity that HMRC can prove you did knowingly and willfully to cheat the exchequer.

This offence is a common law offence and is reserved for the significant criminal/criminality. It is a conduct offence, meaning a loss by HMRC isn’t absolutely necessary to convict.

Contact us in complete confidence to discuss any information you may have about an offence of tax evasion.