Modus Operandi by Mauro Corvasce (universal ebook reader txt) 📕

agencies and both licensed and unlicensed couriers. Other cash intensive businesses such as liquor stores, automobile rental and convenience stores are also being used.

High-dollar retail businesses, such as exclusive clothiers, auto dealerships and high-volume cash businesses, such as service stations and convenience stores, are particularly vulnerable to use by money launderers. Criminals may use these businesses as legitimate sources of income or employment to justify large sums of cash or conspicuous material wealth. In some cases a seemingly legitimate business can serve as a base from which to operate illegally. As a laundering vehicle, seemingly legitimate companies can cloak the criminally derived profits as well as the identity of the owner of the illicit capital. Criminals can then establish new businesses for the purpose of laundering funds or they may attempt to corrupt an existing business.

The center of the diamond jewelry and precious metals industry for the United States is in New York City. The traditional secrecy and large amounts of money of this industry makes it particularly vulnerable to infiltration by money launderers. These industries have been the focus of three major drug money laundering indictments returned in the last five years.

The travel and transportation industries including freight forwarders and shipping companies are also particularly vulnerable to exploitation by money launderers.

Banks. We have found that a financial institution and its employees play a major role in money laundering activity, either wittingly or unwittingly. Investigations have disclosed that bank officers and other employees accepted bribes from criminals for receiving and processing large amounts of money without filing the appropriate government forms or by filing false reports. Numerous bank officials have been indicted for facilitating money laundering activities.

Wire transfers are believed to be a significant avenue for money launderers to move large sums of money. The Clearinghouse for Interbank Payer Systems (CHIPS) is located in New York City and handles over 90 percent of all United States dollar payments moving between countries around the world, including foreign trade payments and currency exchanges. Fedwire, the wire transfer system operated by the federal reserve, and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) also conduct a substantial amount of wire transfer activity.

Securities Market. The Financial Securities Market is another area in which money laundering occurs. Our experience has shown that a good portion of all drug proceeds are laundered by this means. Currently, investigations in New York City indicate that drug dollars are being laundered through stocks and bonds. A recent study revealed the relative ease with which an investor can place currency into the system. This obviously means that some bank personnel are re-arranging the paperwork so that the proper forms are not being filed for deposits over ten thousand dollars.

Nonbank Financial Institutions. With the success of the Bank Secrecy Act (BSA), which requires all deposits of more than $10,000 be reported to the IRS, money launderers have begun to turn to alternatives other than the established traditional financial institutions. These alternative or nonbank institutions take the form of services labeled as money transmitters, check cashing services, courier services, travel agencies or currency exchange houses. The term nonbank financial institution has been used to loosely refer to:

1. Those persons or entities that receive money for the purpose of transmitting it, domestically or internationally, through courier, telegraph, computer networks, telex or facsimile.

2. Those persons or entities that convert money into traveler's checks or money orders from the currency of one country to the currency of another, and from personal checks, business checks, money orders or bank checks into currency.

These businesses or nonbanks have proliferated in recent years throughout the United States especially in densely populated areas and within the inner-city ethnic communities. These nonbanks are usually fairly diverse and provide services and opportunities that may assist the money laun-derer in creating anonymity: Little if any paper trails exist, and illicit funds are consolidated or co-mingled with legally gained funds or profits, thus concealing the true source or owner. These nonbanks may be operated independently in store fronts or within other businesses, such as liquor stores or travel agencies. These multifaceted establishments deal almost exclusively in cash received from the consumer in exchange for services.

Our knowledge of these types of launderers reveals that a substantial number of these nonbanks are active in the New York City area. Using a threshold of $100,000 in cash transactions reported via STRs over a two-year period, they produced approximately one hundred entities nationwide. Of these one hundred businesses, twenty-three, or about 25 percent, were located in the New York City area. A large portion of these were in Jackson Heights, Flushing and Queens. A majority of these New York businesses were owned by or employed ethnic groups such as Dominicans, Colombians, Haitians and Nigerians. Almost half of these businesses have been investigated by law enforcement, and some are suspected of or have been arrested for money laundering of cocaine trafficking proceeds.

Businesses operating as money transmitters are required to be licensed in the state of New York. These businesses are required to apply and post a bond to protect the consumer. The applications are subject to an investigation, which determines the suitability of the applicant. However, as best as we can determine, criminal background checks are not conducted. The number of unlicensed transmitters by far outweighs those businesses that are licensed by the state.

Jewelry and Precious Metals. The jewelry and precious metals industries (including diamonds and gold) for the

United States are centered in New York with wholesale dealers concentrated in the famous diamond district of Manhattan. The traditional secrecy and confidential business relationships surrounding these industries, the high value of the commodities, and the traditional cash nature of many transactions all combine to make these industries particularly vulnerable to money laundering activity. In fact, several law enforcement officials named the 42nd Street Diamond District as the single hottest spot in New York City for money laundering. The consensus was that no single ethnic group was involved but that almost all the legitimate businesses in the area had been approached by money