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The Latest Money Laundering Statistics in 2023

  • Vrinda Mathur
  • Mar 02, 2023
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Money laundering is the illegal practice of making large sums of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have originated from a legitimate source. The money obtained through criminal activity is deemed dirty, and the process "launders" it to make it appear clean.


Money laundering is a serious financial crime perpetrated by both white-collar and street-level criminals. The majority of financial institutions now have anti-money laundering (AML) policies in place to detect and prevent this activity.


There are various types of cyber-attacks that can cause significant damage. Unauthorized access to your network or computer system can be gained by an intruder. Data in your systems can be damaged, destroyed, stolen, blocked, or manipulated due to cyberattacks. Money laundering is a type of cybercrime.


What is Money Laundering?


Money laundering is the process of obtaining a large sum of money from criminal activities such as terrorist activity or drug trafficking that began from a legitimate source.


Criminals attempt to conceal the source of money obtained illegally in order to make it appear legal. If they do not, the illegal money can be used to link them to criminal activity. So we can say that the money from illegal activity is dirty, and the process launders it to make it appear clean.


To avoid the legal consequences of this action, the property is converted/transferred for the purpose of concealing/disguising the illicit origin of the property, etc. Criminals can keep control of their proceeds while also providing a legitimate cover for their source of income if money laundering is done successfully. Money launderers have devised methods to structure large amounts of currency in order to avoid the requirement to file currency transaction reports (CTRs).


Money laundering occurs in many countries around the world, and a common scheme involves moving funds across multiple countries to conceal their origin. When done electronically, it is referred to as cyber laundering.


Traditional money transfer methods rely on the banking system, but cyber-laundering relies on a diverse set of transactions and financial service providers, including wire transfers, cash deposits/withdrawals, e-money transactions, and remittance services. Assume the chosen payment system includes online payment capabilities. 


In that case, the funds can be converted to electronic cash before being transferred quickly and almost secretly overseas, making the task of law enforcement detecting and tracking illicit funds extremely difficult.


Also Read | Understanding Anti-money Laundering


Stages of Money Laundering:


Although criminals may not always adhere to it, the money laundering process typically involves three major stages. They are as follows:

Stages of Money Laundering 1. Positioning 2. Adding Layers 3. Implementation

Stages of Money Laundering


  1.  Positioning:


The deposition of illegal proceeds into a bank account is referred to as the placement stage (home or abroad). People can, for example, send cash in the form of goods (luxury items), precious jewels, or even cheques and convert it into other currencies. 


They can then transport these valuables or money abroad, away from their point of origin, i.e., where the crime was committed, to a country that allows for easy investment and deposition. Transportation can take any form, and third-party individuals or corporations are frequently involved.


  1. Adding Layers:


At this stage, the origin of the criminal proceeds is concealed. This process is complicated, and the goal is to conceal all traces of dirty money. People can transfer money between countries, individuals, or corporations and split it up into multiple accounts. 


They do this by using banks with strict privacy policies and nominating offshore corporations as bank account holders. There may also be constant transactions in the account, such as currency conversions and money conversions into physical assets.


  1.  Implementation:


The stage of integration is where criminals create the "legal" origin of money. In other words, the money has now re-entered the economy unnoticed. This can occur in a variety of ways, including:


  • Using a false proof of capital gains or loans to disguise the money as business income.
  • Using the money in third-party transactions and forging invoices, contracts, deeds, and agreements.
  • By combining legal and illegal sources of income, price manipulation of invoices, turnover, and sales proceeds is possible.
  • Purchasing properties while concealing ownership information


They can then invest the funds in real estate, securities, and other financial instruments, as well as cryptocurrencies, or use them to fund legal or illegal businesses. They can also spend money by living a luxurious lifestyle and purchasing expensive items.


Examples of Money Laundering:


Two of the most famous examples of Money Laundering have been discussed below:


  1. BCCI:


The Bank of Credit and Commerce International, or BCCI, was a truly global financial institution. It was founded by a Pakistani businessman and had its headquarters in Belgium but did the majority of its business in the United Kingdom. In addition, it was charged with money laundering in the United States in 1990.


Throughout the 1980s, BCCI transacted with criminals from all over the world. Clients included dictators Saddam Hussein and Manuel Noriega, as well as members of Pablo Escobar's notorious Mexican drug cartel, according to US intelligence documents. The bank financed prostitution, terrorism, and the sale of weapons, including nuclear weapons.


These crimes were discovered during a PriceWaterhouseCoopers financial audit in 1990. (now PricewaterhouseCoopers). An informant at BCCI informed the auditors that the accounts they were investigating were fraudulent. Price Waterhouse sent this report to the Bank of England, the United Kingdom's central bank. International authorities closed all of the bank's branches and seized its assets in 1991.


The bank was about $20 billion in debt when it failed. It took liquidators nearly two decades to recoup about 90% of that. More than 60 people connected to BCCI were charged with crimes, and one businessman was sentenced to 14 years in prison.


  1. Wachovia:


Neither the BCCI nor the Nauru shell banks were ever legitimate financial institutions. Their stories, however, are not typical. The majority of cases involve legitimate banks becoming involved in money-laundering activities. Wachovia is one such example.


Wachovia was one of the largest banks in the United States in the early 2000s. It did a lot of business for Mexican and Colombian drug cartels, in addition to its many legitimate customers. According to Reuters, the bank handled at least $110 billion in drug money from 2004 to 2007.


The money-laundering scheme had several stages. Drug dealers smuggled cash from US drug sales across the border into Mexico, then laundered it at currency exchanges known as "Casas de Cambio" (exchange houses). They deposited the funds in Mexican bank accounts with less stringent disclosure requirements.


They later returned the funds to the United States. They transferred some funds to Wachovia accounts. They also used traveler's checks and bulk cash shipments through a Wachovia service. In violation of the law, the bank never investigated or reported any of these transactions as suspicious.


These crimes were discovered during a Drug Enforcement Administration investigation. After discovering narcotics aboard a plane in 2005, the agency began tracking down the money used to purchase it. Martin Woods, a whistleblower in Wachovia's London office, assisted the agency.


The US government charged Wachovia with money laundering after a 22-month investigation. However, Wells Fargo had already purchased the bank. The case was settled in 2010 after the new parent bank cooperated with investigators.


Statistics of Money Laundering across the Globe:


Money laundering is a persistent issue that affects countries all over the world. Illicit funds are used to fund terrorist acts and criminal activities, and anti-money laundering regulations are becoming more complex over time. Below stated are some of the statistics around the globe 


  • Fiat currencies are used to launder 400 times more money than cryptocurrency. Contrary to popular belief and what the media portrays, Bitcoin is not a typical venue for money laundering activities. Bitcoin has only accounted for $2.5 billion in money laundering since its inception in 2009. This amount is significantly less than the annual $1 trillion in fiat currency money laundering statistics estimate we lose.


  • The market for anti-money laundering software is expected to reach $1.77 billion by 2023. The market value of anti-money laundering software is increasing. The market was worth $690 million in 2016 and $868 million in 2017. According to available anti-money laundering statistics, the market value of the industry is expected to reach $1.77 billion by 2023.


  • Only 0.1% of criminal funds are recovered through anti-money laundering efforts. According to a study conducted by Ronald F. Pol of La Trobe University in Melbourne, Australia, the combined efforts of nations to combat money laundering appear to be ineffective. Using global money laundering statistics, this researcher discovered that only 0.1% of illegally obtained funds are recovered from criminals. This allows lawbreakers and organized groups to spend the majority of their funds on criminal activities.


  • In 2020, global money-laundering statistics related to terrorist financing remained high. The Basel AML Index tracks 144 countries' annual progress against money laundering and terrorist financing. According to the report, the index in 2020 is 5.22 out of 10, with 10 being the highest risk. Only six countries improved their anti-money laundering efforts, according to the report.


  • According to 2022 money laundering statistics by state, Florida has the highest number of offenders. The US Sentencing Commission issued its quick facts on money laundering in the country, which included a list of the top states or districts with money laundering cases. The Southern District of Florida had the most money laundering offenders, with 71 convicted criminals, according to the agency. The Southern District of Texas then prosecuted 49 offenders.


According to the data and figures gathered here, regulations and anti-money laundering policies appear to do little to track down funds amassed by criminals. In fact, statistics show that the costs outweigh the benefits and results. This is concerning because money laundering is a source of funding for all other crimes, not just white-collar crimes.


Law Enforcement for Money Laundering:


The 'Hawala System' is the name given to money laundering in India. It is India's most well-known strategy for moving money without the assistance of an administrative expert. The money is not actually transferred, but rather carefully transferred to another individual working under the Hawala framework, similar to the shipper.


In India, illicit money is frequently moved abroad through this framework. The following are the legally upholding resolutions used in India to distinguish and prevent money laundering:


Money Laundering Prevention Act of 2002:


The Central Government proposed this act to prevent money laundering and the capture of property obtained through money laundering. It was ordered on January 17, 2003, and authorized on July 1, 2005.


Wrongdoings such as middle-class violations, corporate and monetary forgeries, drug dealing or carrying, and, surprisingly, cross-border wrongdoings (if at all associated with India) fall under the purview of the PMLA Act, 2002. The government controls entities such as monetary foundations, banks, and other related associations.


Different violations that frequently lead to money laundering or precede money laundering are also addressed. Discipline recommended in the demonstration includes a prison term (indefinite detention) of at least 3 years and up to 7 years.


The Black Money (Undisclosed Foreign Income and Assets) and Taxation Act of 2015:


This was familiar with the control of a citizen of India's black money and foreign resources, assuming he is associated with concealing that property for tax avoidance or another illicit monetary benefit. It was established in May 2015 and was upheld on April 1, 2016.


In general, this Act applies when any Indian resident receives a financial benefit from an unfamiliar resource or record. When the money is transferred and converted into INR, the owner of the property is obligated to pay taxes on it in accordance with the laws.


If a person tries to conceal any unusual increases, he may be held accountable under this Act. The aggregate punishment for having undisclosed property is multiple times the assessment process in addition to essential expenses 





In Conclusion, Most countries are working hard to improve the global framework for combating money laundering and other financial crimes. Despite the fact that Money Laundering and Psychological Oppression financing are two distinct phenomena, many predicate wrongdoings have been observed and perceived in the global enemy of the Money Laundering framework.


Increasing the number of these offenses may also result in legitimate issues such as overcriminalization and a clash with fundamental criminal law principles. Its standard-making authority over the global anti-money-laundering structure also aids in separating the global political conversation on anti-money-laundering activities.

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