Case Study: Money Lauundering

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Fraud is a problem faced by society today. For years people have been misrepresenting themselves and their companies to unsuspecting victims who falls prey to their schemes. There are many different types of fraud one can participate in including management fraud, vendor fraud, employee embezzlement, investment scams and other consumer frauds. In this case study money laundering will be the highlight of this entire case.
Money laundering can be defined as the process by which one conceals the existence, illegal source, or illegal application of income, and disguises that income to make it appear legitimate. In other words it is a process used by criminals through which they make “dirty” money appear clean from illegal activities such as drug
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This stage involves moving the money to other financial institutions in an effort to disguise the link between the money and its criminal origins. These transactions may include the purchasing of investment instruments, insurance contracts or letters of credit.
The final stage of the money laundering is called integration. stage. At this stage the money is returned to the criminal from what seems to be legitimate sources, for example, the purchase of luxury assets, investment in real estate or entering business ventures. The funds may also be used to fund further illegal
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Client Transactions
• Clients who seek to exchange large quantities of low denomination notes for those of higher denomination.
• Structure cash activity to be less than the amount that requires filing reports.
• They make frequent deposits or withdrawals of cash for no apparent business reason or without counting the cash.
• Deposit and withdrawal transactions conducted in cash rather than through forms of debits and credits normally associated with commercial operations (e.g. cheques, Letters of Credit, Bills of Exchange, etc.).
• Large cash withdrawals form a previously dormant/inactive account, or from an account which has just received an unexpected large credit from abroad.

Each money laundering investigation has two goals which include the ability to prove that there was illegal activity and the financial activity that could be linked to it. The success of each investigation rests on the initial approach. One of the biggest challenges in a money laundering investigation is providing the evidence that the assets are a benefit derived from criminal activities. To establish this paper-trail, fraud examiners must identify and trace the assets or “follow the money” to determine the

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