(411 hen) I agree with this Gatekeepers play a critical role in money laundering because criminals need to manipulate gatekeepers or find one that is immoral to facilitate financial transactions that funnel large amounts of illegal money into the financial system. 200 words supporting the above statement please provide references

 

 

This is in response of this statement:

 

1) Terrorist Financing

Summary: Terrorist groups fund their operations in many ways which include money laundering through non-profit and charitable organizations, selling goods that they obtained illegally such oil and artifacts, smuggling massive amounts of money, and wire transfers. This led to terrorist financing being a priority of the Financial Action Task Force (FATF) on money laundering. The FATF developed special recommendation VIII after the attacks on 9/11 which 83% of countries that are members are said to be partially compliant or non-compliant (Shillito, 2015).

Example: The charitable organization known as Jamia Asariya Madrassa was designated as a specially designated global terrorist group because Abdul Aziz Nuristani controls it and it is being used to support the terrorist organization known as Lashkar-e-Tayyiba (United States Department of Treasury, 2016).

Reason this is important: It is important to recognize terrorist financing because it is important to know how terrorists who are one of the biggest threats that exist today, are funding their operations. This is also important because the fact that terrorist groups are using non-profit and charitable organizations to support their operations shows how these groups are using the systems that countries have to fund their operations and carry out attacks or spread their message. The scary thing is that terrorist groups are taking advantage of much more than non-profit and charity organizations such as the First, Second, and Fourth Amendments.

2) Gatekeepers

Summary: Gatekeepers play a critical role in money laundering because criminals need to manipulate gatekeepers or find one that is immoral to facilitate financial transactions that funnel large amounts of illegal money into the financial system. Gatekeepers include investment bankers, accountants, and lawyers who are subject to many sanctions if they are caught laundering money that is meant to deter them from this activity, but there is a low probability of detecting fraud without the help of gatekeepers (Gadinis & Mangels, 2016). Once a gatekeeper gives a criminal access to the monetary system, they will make or assist them in making transactions to launder their money that are within the legal limits to avoid attracting attention and conceal their money in the system in various ways. It is also important to recognize that the gatekeepers can commit money laundering and fraud on their own.

Example: An accountant in Ohio named Jonathan Davey served as the administrator for many hedge fund accounts linked to the Black Diamond Ponzi Scheme that resulted in four hundred victims being deprived of $29 million plus the $11 million that Davey collected himself (Internal Revenue Service, 2016).

Reason this is important: It is important to recognize gatekeepers because it makes it evident that the security of the financial system is only as strong as the gatekeepers make it. In other words, the sanctions, policies, and all the recommendations to prevent money laundering will not be very useful as long as the gatekeepers decide that their desires such as becoming rich are more important than doing the right thing and having integrity. With this said, simply putting harsher punishment in place will only deter people so much because the lack of ethical decision-making skills seems to the source of this issue which is why ethics training would help this problem..

3) Using Cash to Conceal Money Trail

Summary: Criminals use cash to hide the source of their funds and avoid creating a paper trail which helps prevent them from connecting them to crime and authorities from being able to determine the amount of money that is flowing to or from a criminal. The use of cash also prevents the authorities from freezing their funds. Criminals can also invest their money in cash businesses such as nightclubs to launder their money since it is hard to determine if the money is coming from legitimate sources of illegitimate sources.

Example: The Unites States Border Patrol seized over three million dollars in cash that were going to be smuggled into Mexico after officers caught two vehicles speeding which led to them finding cash in the trunk of one car and cash in the center console of the other vehicle (Repard, 2016).

Reason this is important: It is important to recognize that criminals are using cash to avoid creating an audit trail that can be used against them because it shows how law enforcement will not be able to detect them unless they find large amounts of money or they are aware of their activity.

References

Gadinis, S., & Mangels, C. (2016). Collaborative gatekeepers. Washington and Lee Law Review, 73(2), 797-914. Retrieved from https://search-proquest-com.ezproxy1.apus.edu/docview/1822923200?accountid=8289

Internal Revenue Service. (2016). Examples of money laundering investigations â fiscal year 2015. Retrieved from https://www.irs.gov/uac/examples-of-money-laundering-investigations-fiscal-year-2015

Repard, P. (2016). Feds seize $3 million from smuggling suspects. Retrieved from http://www.sandiegouniontribune.com/sdut-million-dollar-cash-smuggle-seizure-2016aug26-story.html

Shillito, M. R. (2015). Countering terrorist financing via non-profit organisations: Assessing why few states comply with the international recommendations. Nonprofit Policy Forum, 6(3), 325-352. doi:10.1515/npf-2015-0018

United States Department of Treasury. (2016). United States and Saudi Arabia designate terrorist fundraising and support networks. Retrieved from https://www.treasury.gov/press-center/press-releases/Pages/jl0400.aspx

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