“Behind every great fortune is a crime” (Balzac, 1835)
Money laundering is not a new phenomenon – studies show traces of money laundering practices used on daily basis by merchants in China some 4,000 before Christ. These traders would disguise and mask wealth from their rulers mainly to avoid tax. If and when caught a trader would be made to face banishment and the funds would be taken from them.
Throughout history money laundering was used for hiding money or other assets (property) from the state for reasons such as avoid of confiscation, concealment of funds resulting from crime or taxation. Money laundering has blended in with the history of trading and that of banking, as concealment of funds would have been done in investments in other business operations in remote provinces or outside the Chinese jurisdiction.
Thus the distribution of funds into offshore jurisdictions was born, one may also discuss that due to the funds being placed in an offshore jurisdiction – tax evasion was prevalent.
The main objective therefore was to conceal funds and invest them into other business where such wealth would be transferred into the custody of a third party. In the 20th century the term “money laundering” was linked to the notorious gangster Al Capone, who was allegedly involved in prostitution, illegal gambling and the illegal production of alcohol. Being involved in such illegal activities generated substantial amounts of money -in cash, which were then ‘converted’ from dirty to clean money.
Other evidence that shows money laundering long existed is the fact that researcher Billy Steel refers to the use of ‘Laundromats’ which clearly describes the process of money laundering in comparison to cleaning laundry… “illegal (dirty) money is put through a cycle of transactions (washed), so that it comes out at the other end as legal (clean) money (Steel 1998/2003).”
The underlying main concept and principles of Money laundering through time have not changed, but the tools and mechanisms to drive money laundering have changed drastically.
At QGEN we constantly invest in R&D to ensure we are one-step ahead of the game – we can assist your organisation to prevent it being targeted for financial crime.
This is a list of offences related to Money Laundering and White-collar crime:-
Ensure you take all the AML precautions when conducting your day-to-day business. QGEN advisors can audit your compliance department (QGEN’s Advisory arm) and help verify clients/partners/entities on the other side of transactions/employees through managed KYC/KYB services. Email us on: info@QGENGroup.com