Money Laundering in the New Age of Virtual Currency Introduction “Money laundering is the process by which one conceals the existence of illegal source, or illegal application of income, and then disguises income to make it appear legitimate”. By the 1970’s, criminal organizations and more specifically, the drug trade began to make profits that attracted the attention of Congress. In 1999, it was estimated that drug trafficking alone produced approximately $48 billion in profits per year to be laundered in U.S. Dollars. These profits could no longer go unnoticed by drug dealers spending it on daily activities such as food, clothes, and entertainment. From a pure logistics standpoint, $48 billion dollars isn’t going to fit under the mattress. Drug dealers were forced to try and blend these profits into legitimate business or pass it through financial institutions in the hope that the money’s origin would become obscured. Congress recognized this new problem that criminals encountered and began to enact money-laundering laws aimed at preventing the criminals from accessing these profits. Congress has created a regulatory system that works to identify the point at which criminals try and invest those profits or funnel them through the financial institution. As the black market becomes more profitable, anti-money laundering laws provide a unique alternative to many of the other laws aimed at preventing and punishing crime. Instead of only convicting the drug dealer who stood on the corner, anti-money laundering laws establish liability for anyone who has knowledge of the illicit origin and proceeds to transact with the drug dealer. They aim to take away any ability to use profits and thus any incentive to get involved in profitabl... ... middle of paper ... ...prove the Treasury Department and the IRS’s ability to identify the source, volume, and movement of currency and other monetary instruments transported in and out of the United States. The Moral of the Story The real goal behind Congress’s anti-money laundering scheme is that of complete transparency. Congress wants to be informed. Currency reporting makes this information a federal interest. Information is the glue that holds the whole structure together. Any attempt to use cash or its equivalent in excess of $10,000 will immediately raise the suspicion of any legitimate bank or business. The bank or business will report this persons name, tax identification number, and other pertinent information to the IRS and the Treasury department. Since Bitcoin offers anonymity for its users, it is no surprise that it has been at the central of money laundering controversy.
The Mexican drug cartels have been smuggling drugs across the boarder of Mexico to the United States of America for decades. The Mexican drug cartels are a drug smuggling criminal organization. In other words they run a narcotic drug business. * In my research, I will be discussing about the money being laundered by the Mexican drug cartels from the U.S. to Mexico. The cartels need to launder their money in order to be able to take their drug money back to their country of Mexico.
One aspect of financial incentives lay in the concept of forfeiture. Law enforcement agencies were granted authority to keep the bulk of cash and assets seized when making arrests, which allowed the drug war’s perpetual existence. The drug market then needed to be profitable and successful so that police forces could make money (Alexander, 78-79). A person could be found innocent of a crime and their property could still be subjected to seizure, and “those who were targeted were typically poor or of moderate means, lacking the resources to hire an attorney or pay the considerable court costs” (79). Ultimately, this process was highly lucrative for police. Those with assets could buy their freedom, while those who lacked financial means were subject to arrest. Additionally, there was no real justification for many of the raids. For example, some officers took as little as 93 cents in raids, even though by no means could that amount be considered drug money (82). Property could also be considered “guilty”. For example, a woman who knew her husband sometimes smoked marijuana could have her car forfeited since she allowed him to use her car (83). Unfortunately, forfeiture cases are left unchallenged 90% of the time, since the primary targets of this practice cannot afford lawyers to fight the case. Additionally, federal funding to police departments provided incentives for police arrests in the drug war. Law enforcement agencies that made drug-law top priority were given large sums of money, leading to competitions between departments and higher arrest rates (Alexander, 74). And not only cash assets, but military equipment was doled out by the Pentagon to local police departments in hopes that it would increase arrest rates
Drug trafficking has been a massive concern between the borders of Mexico and the U.S. “since mid 1970s” (Wyler, 1). Drug trafficking is “knowingly being in possession, manufacturing, selling, purchasing, or delivering an illegal, controlled substance” (LaMance, 1). A dynamic relationship exists amongst Columbia, Mexico, and the U.S. the informal drug trafficking economy. This growing informal drug economy leads to many individuals creating a substantial living through this undercover market. These individual drug cartels monopolizing the trafficking market are a growing problem for the U.S economy and need to be located and controlled. If this trafficking continues, the U.S. informal economy will crush the growth of legal industries. The trafficking and abuse of drugs in the U.S. affects nearly all aspects of consumer life. Drug trafficking remains a growing issue and concern to the U.S. government. The U.S. border control must find a way to work with Mexico to overpower the individuals who contribute to the drug trafficking business. This market must be seized and these individuals must be stopped.
The drug problem in the U.S. and around the world is an important issue and seems to be a difficult problem to tackle across the board. The inflow of drugs has become one of the largest growths in transnational crime operations; illicit drug use in the United States makes it very difficult for nation states police and customs forces to get a handle on the issues. War on drugs, drug trafficking has long been an issue for the United States. There has been a proclamation of “war on drugs” for the past 44 years.
Drug trafficking is a prohibited, global trade that involves the production, the distribution, and the sales of drugs. It is a topic that has become a very large issue all over the world. It also has had a very big effect on many different countries because they often depend on the business that the drug trafficking creates. Since it has become such a problem, there have been many different efforts to put a stop to drug trafficking by different enforcement agencies. A website about drug statistics, drugabuse.net, indicated that the Drug Enforcement Agency or DEA, as it is well known as, makes over thirty thousand arrests each year dealing with the illegal sales or distribution of drugs. It is also believed that Mexico’s economy would shrink by over sixty-three percent if they lost their drug trafficking industry. There are many different tribulations like this that drug trafficking has created. Many people see it as such a vital asset to some countries, so it has emerged as an extremely big business that brings in a boatload of money. Just like any other immense problem, drug trafficking has its causes and effects
Sometimes these types of operations create a negative image for offices engaged with these types of operations. "The drugs were not real the sentence was", (Wisnieski, 2015). With these types of operations, money is the common ground among crime and criminals. When contraband is seized and money has been recovered by law enforcement or the bad guys lose a significant payoff due to the seizure of their contraband, safety becomes the focal point. Safety of the officers and victims become primary as malum in se offenses have retaliatory consequences.
estimated 7 billion dollars earned in shadow market. This money is used for drugs, gangs, mafia,
The forfeiture laws allow the government to seize property from people it believes to be involved in drug-related activity, and then to use that revenue to bolster the efforts of law enforcement. The concept is simple. If you use your car, plane or boat to transport drugs, you will lose your car, plane or boat. And if your cash was acquired through illegal drug sales, you will lose that cash and anything bought with it. Forfeitures, however, can fall into two categories--criminal or civil--and due to some high-profile abuses, civil asset forfeiture has become extremely controversial. Under criminal law, the government can seize property as punishment only after its owner has been convicted of a crime, and our justice system ensures that they are considered innocent until proven guilty. But under civil law, it is the property itself--not the owner--that is charged with involvement in a crime” (Dunn, 2014, para. 8-9).
In the short story, “Sugar,” Sharon Leach demonstrates the parallel between the protagonist’s sexual desires and her need to provide for her impoverished family. From the very first line the main character, Sugar, reveals her innermost erotic cravings as she describes “the girl in the leopard-print bikini” (170). Sugar’s subsequent actions were self-rendered rational to “keep [her] mother and sisters and brothers fed and clothed for a while” (178). Vivid imagery, the pattern of dismissal, and first person narration facilitate Leach to emphasize human tendencies of sexual behavior while observing the importance of earning a living to provide for ones family and eventually afford the commodities that make Sugar envious of the hotel guests.
BY DOUG HENWOOD What’s being touted in some circles as the future of money looks hardly more peaceful than its past. Bitcoin, a formerly obscure cybercurrency, is now all over the headlines with reports of bankruptcies, thefts and FBI lockdowns. If our fate is to buy and sell bitcoins, this instability is troubling. But despite the headlines, the triumph of Bitcoin and related cyber-currencies is a lot less likely than recent commentary suggests.
Cryptocurrency, such as Bitcoin, has brought in a lot of media attention over the past few months and has been raising eyebrows within government agencies worldwide. Here’s why: Appropriately constructed, cryptocurrency could potentially upend our established global economic system. This newfound technology poses as a serious threat to our currency-issuing central banks and also to the global financial intermediaries. To truly understand the changes that cryptocurrency could potentially bring, you will need to have a general understanding of our current economic system.
4) In the occasion that banks require more cash, they basically print progressively or summon more digits in their electronic records. This system is viable abused and gamed by banks since paper money is fundamentally paper checks with a certification to have regard, with no genuine physical gold off camera to back those
Money laundering is the routing of illegal profits from bank to bank to disguise its existence. The illegal profits are usually made through activities such as drug trafficking, prostitution rings, illegal arms sales, and various other things. Unfortunately money laundering is a serious crime that is still prevalent in the United States and other countries. The Russian mafia, the Triad or Chinese mafia, and the Columbian drug cartel are just a few of the groups that partake in money laundering. No one knows exactly how much money is laundered yearly but it is estimated to be about $100 billion in the United States. The United States is not the only country affected by these numbers. The estimated amount of laundering is 2% - 5% of the world’s GDP, between $600 billion and $1.5 trillion dollars annually. Although there are hundreds of ways in which to launder money, some are more lucrative than others. For example, the Black Market Peso exchange, gold, and digital cash are some of the more common ways to launder money. Making it harder to crack down on money laundering is the fact that many countries do not have money-laundering laws in place like the United States does. These other countries make it possible for this illegal activity to carry on, and are only hurting themselves because money laundering creates a direct negative effect on their economy. If these nations want to fight money laundering they will need to implement laws against it. Banks could be one of the most useful tools in stopping the laundering of money.
The invention of money is perhaps one of the greatest achievements of human civilization. From the very beginning of society, people have used money to circumvent the difficulties of bartering and to foster trade and commerce. Since then, money has come a long way. No longer do we need to rely on silver coins, cocoa beans, or even anything of intrinsic value to conduct our business; today, we use paper currency, which is convenient and easy to carry around. But slowly, we are moving into the digital age of money, an age in which less of our money is actually tangible and more of it is just data on a computer server.