World Money Laundering Report: Volume Six

Contents Volume Six, Issue One

Sense breaks out in a UK court

After a series of cases which undermine the prosecution of money laundering cases, a Court has made a decision that supports the purpose and words of the legislation.

“Medical Marijuana” – challenges for law enforcement and possible US constitutional threat.

California resident Diane Monson has chronic back pain and her doctor acknowledged that the smoking of marijuana might relieve some of her symptoms. She tried it, it worked and the doctor certified Monson as a user of marijuana for medical purposes. Under California law, this allows her to have possession of pot. But...

Spoof banks: increasing trend

In just over six months the US Comptroller of the Currency has warned of six fictitious internet banks.

Confidentiality: when things go wrong.

Several years ago, every lunchtime for more than an hour, a computer would dial our telephone number in London and keep doing it. Now a bank's machine has been up to similar tricks

Outsourcing: risks demonstrated.

The buzzword in all things computing is “outsourcing” – and there are even questions asked about outsourcing non-technology functions including, occasionally, compliance.

Big ticket items.

We all know about airline tickets as a laundering exercise (see How Not To Be A Money Launderer, Morris-Cotterill, Silkscreen Publications,1996) but how about events tickets?

South Africa: Feature

Nigel Morris-Cotterill travels to South Africa to get a feel for how institutions and the public are coming to terms with FATF membership and the obligations it brings.

 

Contents Volume Six, Issue Two

SOUTH AFRICA: FICA 2002

Legislation in South Africa is comprehensive but contains several provisions that will raise eyebrows in a number of countries

USA PATRIOT ACT - RENEWAL OF SUNSET PROVISIONS

There are no forceful opponents of the renewal of several sections of the USAPA, including those who were silenced during the passage of the Act with allegations that their dissent was "un-American."

UNDER COVER OF DARKNESS.

An article that was spiked in September 2002 now seems disturbingly pertinent.

FLIP SIDE

a software advert amuses...

UK SETS OUT CRIMINAL KINGPIN PROPOSALS

The UK's government has announced a new breed of prosecutor especially conditioned to handle organised crime. Is it just another statement of intent, or is there any merit in it?

UK: CASE STUDIES ON PROCEEDS OF CRIME CONFISCATIONS

A round up of actions under the POCA 2002

SINGAPORE : DRAFT GUIDELINES.

Summary.

INFORMATION SECURITY: THE BANKER'S TALE

Not all banks have excellent security systems.

FISHY PHISH

A very clever internet scam is bound to catch many people out.

Contents Volume Six, Issue Three

UK: Still crazy after all these years.

Is there a conspiracy amongst UK judges to find ways to limit the effect of the UK’s Proceeds of Crime Act 2002? The latest in a series of judgments again impacts on the reporting of suspicions by lawyers. A wide ranging judgment in the case of Bowman v Fels will have huge ramifications for how the UK’s counter-money laundering laws are applied.

Publishers force OFAC climbdown.

Publishers in the USA are challenging OFAC rules relating to contacts with Iran. They say that version of the rules published last year is having an unnecessarily damaging effect on US businesses whilst not providing any sanctions benefits...

Book Reviews.

Review: Blood from Stones: the secret financial network of terrorFarah, DougBroadway BooksISBN: 0 7679 1562 3

A book of facts not a story book, set into a story format. And it’s often a gripping story.

Review: Money Laundering: controls and preventionBedi, Rohan.ISI publicationsISBN 962 7762 873

Derivative.

Buy rating? Don’t bother

Eleventh UN congress on crime prevention and criminal justiceBangkok, Thailand 18-25 April 2005

Eleventh UN crime congress in Bangkok focuses on organised crime, terrorism

Fraud ties in with US action against Latvian bank.

“I love it when a plan comes together.” But someone else's plan is falling apart.

Contents Volume Six, Issue Four

The Eagle’s Disbanded and other cautionary tales

The big birds have come down from the (mostly) imposing frontages of Riggs Bank - but that doesn’t mean it’s all over because the ripples are continuing to spread as a Chilean bank gets fed up with the whole mess.

China gets seriousDon’t be under any illusions: China is making massive strides in law and regulation and it’s taking money laundering issues very seriously, too

Flip Side: we nearly split our sides when we saw this advert for, er, laughter therapy in the workplace.

New FinCEN MSB rules: increased compliance problems for foreign banks?The Guidance notes issued by FinCEN and other regulators offer help for dealing with MSBs, but no comfort for anyone trying to define the compliance perimeter where US rules are concerned.

So you want to be a diplomat?We examine the interesting world of oddball identification that can ruin your day when you think your due diligence is completed.

 

Contents: Volume Six, Issue Five

Malaysia: Report of the Special Commission to Enhance the Operations and Management of the Royal Malaysia Police (aka Royal Commission on the Malaysian Police).

One of his first actions as Prime Minister was for Abullah Badawi to form a commission to investigate the Malaysian police to learn the truth behind the constant allegations that they are inefficient, lazy and corrupt.

USA: Bank Inspection Manual published.

The USA's Federal Financial Institutions Examination Council released its "BSA / Anti Money Laundering Examination Manual on 30 June 2005. The disclosure of what inspectors are looking for is welcomed by those regulated, but it has a downside ...

The Price is Rice

On some figures, the price of rice has increased by 30% in the past year although how much of that has found its way to the producers remains unclear.

Some news you might have missed.

It's amazing how much of financial services companies' customer data is outside an effective security perimeter.

The economics of spam

The plague of spam continues to grow. The whole industry is based on a number of bases, several of which are fraudulent. But the most persistent spam in our mailbox in the past month has not been for Viagra or similar, nor even for free mortgage calculators (we’ve had many of those but from lots of different sources) but from a company trying to sell its KYC watch list.

When accidents happen

As the range of subjects that fall into the compliance officers' arena increase to the almost comical, some screenshots tell a rather worrying tale as they show how third party automated processes can create a risk that is, often, outside the control of the companies concerned.

News from India and Canada.

 

Contents: Volume Six, Issue Six

 

THE BUSINESS OF ORGANISED CRIME IN MACAU CASINOSBy Angela Veng Mei Leong

This paper focuses on both the macro and the micro-aspects of gambling and crime in Macau.

Macau: the Casino effectNigel Morris-Cotterill

For those that last visited Macau, say, ten years ago, the changes are amazing.

Book Reviews

Crime School: Money LaunderingMATHERS, Chris

Essential Reading

The Washing MachineKOCHAN, Nick

Necessary

FreakonomicsLevitt, S and Dubner, S

A qualified "buy" recommendation.

News: Internet banking, Russian corruption and Malaysia's mobile phones.

 

Contents: Volume Six, Issue Seven

The Power of One

How the smallest number can help you identify suspicious transactions and improve your risk management.

FinCEN's website fails compliance test

The US Government's published list of guidelines for official websites contains a list of requirements and recommendations.

First - Second - gone

A note in an auction catalogue starts a trail to a fascinating story.

 

Contents: Volume Six, Issue Eight

Not Dead Yet: Nigel Morris-Cotterill

It's beginning to look as the words "not dead yet" will be my epitaph. Certainly my friends are beginning to expect this half-joking SMS every time I travel - which is often.

How vodka saved my life

“Nice sunset,” I said. “ Let’s have another vodka." A short while later there was an SMS from someone in Jakarta: “are you in your favourite restaurant?” it asked my friend. "I hope not because there are bombs.”

Lessons from Japan: how not to manage a crisis.

In 1997 a number of elements came together to bring down a number of financial institutions, and that led to a catastrophic collapse in manufacturing and, ultimately, to bring about major changes in the Japanese corporate landscape - and systemic changes to ordinary people's lives.

 

Contents: Volume Six, Issue Nine

 

London's drugs problem

An amazing report published in November 2005 demonstrates the extent of drugs abuse in London.

Counterfeiting: Malaysia finds source

The common wisdom is that counterfeit CD / VCD / DVDs are produced in hidden factories. But this ignores the fact that counterfeiting of other products - clothes, leather goods, printed goods including currency - are often produced "out of hours" in factories used for the production of legitimate product.

Battle lines being drawn in Malaysian banking consolidation

A bank takeover in Malaysia may be the first one to go hostile.

 

Race and crime

The violence in Paris is being blamed on racial disharmony, on poor living conditions and on intolerant policing.

But research by Silkscreen Consulting shows that there are deeper factors at play and that those factors define, in part, the nature of crimes that are committed.

 

Fancy turning USD10,000 into USD 11,200 by this time tomorrow?Veritas Centrum.

If you want to make massive almost instant profits, then a High Yield Investment Program (sic) is the vehicle for you. Or so Milhouse Investment Company would want you to believe.

US fails to prosecute bank for laundering

Is the US prosecution and regulatory system a money making machine rather than an organ of justice?

 

Contents: Volume Six Number Ten

Detecting and deterring money laundering in rural communities: the Australian dilemma

Strategist Nigel Morris-Cotterill examines how people in small remote communities do business and how they use banking services, and why these issues should have an impact on the drafting of laws and regulations.

Australia's tortuous route to new legislation

Should Australia now be considered for NCCT status?

Bush burns on altar of USAPA

It's strange: Texans use the slogan "The South will rise again." But in the face of Southern politicians who led the imposition of draconian laws on the US, it's the Southern Rednecks who are leading the fight against the USAPA. Includes full text of relevant sections.

Flip Side and News from USA, Jersey, Google and the strange case of the Lego launderer.

 

Contents: Volume Six Number Eleven

It's like, totally wasted, man.

The USA's insurance industry is preparing to, at last, have a counter-money laundering regime. It's really not very good.

Malaysia and Singapore: actions against drugs traffickers draw fire

Malaysia and Singapore adopt an uncompromising stance against drugs trafficking: those found guilty are sentenced to death.

Malaysia's first conviction under AMLA 2001.

Malaysia has concluded its first conviction under the Anti Money Laundering Act 2001 - but it's not the case we all expected.

News from UAE, Thailand, UK, US, Nigeria and China

 

Contents: Volume Six Number Twelve

Dodgy offshore offers still abound

One would like to think that, by now, the world would have come to terms with the idea that reputable banks in well regulated countries do exercise at least a degree of caution over who they do business with ... one would like to think that, but that's clearly not the case as we found out in this examination of some services widely promoted.

UK: FSA disciplines two reinsurance brokers / block registration of 600 mortgage and insurance brokers.

Two brokers accept that their conduct fell below the required standard but only 10% of applicants to be insurance etc. brokers have abandoned their applications for registration when the FSA told them they were not wanted.

UK: Financial Sector more or less ready for disaster.

A new report shows that the UK financial sector has made good progress in business continuity planning.

ABN AMRO: a bank for our times.

ABN AMRO may be knee deep in the distasteful stuff but it seems that its main crime is being found out. Its problems are far from unique.

Case study: Broadway National Bank, NY.

"Yes, we are guilty of regulatory offences but not of money laundering" : the background to this important case.

Shorts: Israli police have questioned Arkady Gaydamak; USA has at last published rules under s312 of the USA Patriot Act; warning notice from the Belgian Financial Services Commission; US: Michigan protects whisteblowers; more than USD1 milliard in hurricane disaster aid approved in less than a month.