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Deep Dives

Catalina Lobo-Guerrero
journalist
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piqer: Catalina Lobo-Guerrero
Monday, 26 November 2018

The Modern Face Of Money Laundering

Understanding money laundering is difficult, even for Scotland Yard detectives. It seems the methods have become increasingly sophisticated in the past couple of years with crypto currencies and the proliferation of offshore paradises. The Real Story Podcast tries to help listeners understand the scope and ways in which illegal money can end up in the banking systems all over the world.

One of the cases discussed in the program is the Dansk Bank scandal, where over 200 billion dollars were laundered in just eight years, mostly through the Estonian branch of Denmark's main bank. How could this happen? The bank did not check who were some of its customers, many of them Russian or from former Soviet countries, moving money in large quantities. There was no oversight into who they were, where the money came from and if they were doing it for tax evasion or other purposes.

The Dansk bank scandal is just the latest, but HSBC was also fined a few years back for allowing some of their branch affiliates in more than 80 countries to launder money. At least 7 billion dollars from the Mexican branches entered the US and it was estimated that some 800 million dollars was drug money being deposited in the bank. 

In Colombia it is estimated that money laundering accounts for 1-3% of the country's GDP. 70% of that money comes from crime related businesses. The way the money is being injected into the system is by what experts call "smurfing", using several very small players so it's very hard to trace. Sometimes it's done through "mule accounts", using shell companies, remittances and increasingly, bit coin. 

According to Europol, 3-4% of money laundering is now happening through virtual currencies. Criminals are much quicker in learning the advantages of new technology than enforcers, who don't have the capacity or knowledge to understand how this new way of using currency works and don't know how to follow the digital trace. 

The Modern Face Of Money Laundering
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