Tag: money laundering

Can Tax Evasion Land you in Jail for Money Laundering?

30 October 2017

What is Tax evasion

Tax evasion is an illegal practice where a person, organisation or corporation intentionally avoids paying his true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties. Definition courtesy Investopedia.com

A Firstline Securities Limited Blog by: Ahamad Hosein

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Bitcoin, Cryptography And Blockchain Technology…

13 September 2017

…Are These Really Components Of  The Internet Of Value? Part 1

A Firstline Securities Limited Blog by: Maxine King

BITCOIN ACCEPTED HERE”.  That was the sign on the front door of a popular sports bar in Port of Spain, which my friend and I visited for a Friday evening ‘lime’.  I receded and re-read the sign and found it curious that no one paid it any attention; not even my friend who works in the financial sector. I enquired what the procedure was if I wanted to pay via Bitcoin and I was not surprised when the Attendant replied that I had to speak with the Supervisor. My friend said she thought it was some kind of a token for some game.

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SMURFS

12 September 2016

 

What is a ‘Smurf’

Unfortunately, in money laundering the term ‘Smurf’ does not refer to the fictional colony of small, blue humanoids who live in mushroom-shaped houses in the forest.

A smurf, in the real word, is a slang term for a money launderer, or one who seeks to evade monitoring authorities by breaking up a transaction involving a large amount of money into smaller transactions below the reporting threshold into the financial systems. For example, a smurf deposits illegally gained money into bank accounts for transfer in the near future.

One method smurfs use is what is known as ‘cuckoo smurfing. The perpetrators of this money laundering typology seek to transfer wealth through the bank accounts of innocent third parties.

The term originated in Europe because of similarities between this typology and the activities of the cuckoo bird. Cuckoo birds lay their eggs in the nests of other species of birds which then unwittingly take care of the eggs believing them to be their own.

 

Example of Smurfing

Cuckoo smurfing is one way criminals move money internationally. For example, say a country A criminal owes a country B criminal $8,750, and a country B company owes a supplier $9,000 based in country A. The company based in B goes to its Bank and deposits $8,750 with instructions to transfer the money to the supplier’s bank in A. Country B’s banker, working with the criminal in A, instructs the criminal to deposit $8,750 in the supplier’s bank account in country A. Country B’s banker then transfers $8,750 from the merchant’s account in country B to the criminal’s account based in country B. Both the merchant in country B and the supplier in country A do not know the funds were never directly transferred; all they know is the merchant paid $8,750 and the supplier received $8,750.

 

There are four key steps in this process:

 Step 1

A legitimate customer deposits funds to transfer into another customer’s bank account most likely in a foreign country with a remitter.

Step 2

Unknown to the customer, the remitter is part of a wider criminal syndicate involved in laundering illicit funds via the financial system. The criminal remitter, who may be supported by local and foreign criminal elements, coordinates and allocates which portion of the illegitimate funds transfers match the details of the legitimate funds transfers.

Step 3

The criminal deposits illicit cash from crime syndicates into the bank account of the customer awaiting the transfer from regional / overseas. The cash is usually deposited in small amounts to avoid detection under transaction threshold reporting requirements. After an account balance check, the customer believes that the overseas transfer has been completed as legitimately arranged.

Step 4

The criminal accesses the legitimate money that was initially deposited with the remitter. The illicit funds have now been successfully laundered – the criminal owes nothing but a commission to the money launderer for their work.

This is a well organised and structured mechanical system, which is highly sophisticated and a technologically advanced operation to successfully operate a cuckoo smurfing syndicate.

 

Typical characteristics are:

  1. Innocent customer seeking to transfer funds from or to overseas accounts.
  2. Or a customer seeking to transfer funds into their own account, or
  3. An innocent customer overseas seeking to transfer funds to another customer locally
  4. A criminal remitter located overseas
  5. A complicit, local-based criminal seeking to transfer funds overseas
  6. Organiser or coordinator with the resources and contacts
  7. Affiliates and other parties assisting/ working with the organiser or coordinator who make third party deposits into the customer’s account.

Bank staff in particular should be alert to third parties making structured, or otherwise unusual, cash deposits into third party accounts. The essential weakness being exploited by cuckoo smurfing is the lack of identification required of persons depositing funds into third party accounts.

 

Recommendations

We cannot assume anything these days, it’s our money and our responsibility. You need to be aware of what is in your account, always question strange transactions. Ensure the information on your bank statements are correct and are transparent.

 

Closing thoughts – time to consider your investing strategies

 Firstline Securities Limited offers comprehensive coverage of local and international markets with a bias for the energy sector. Firstline offers a number of unique opportunities to put surplus cash to work either as your asset manager or investment advisor. Please contact us for more details at info@nullfirstlinesecurities.com or at 868.628.1175, we can discuss your investment needs in detail and craft a portfolio that makes sense for you. We look forward to hearing from you.

 

 

Money Laundering: Does It Really Affect Me?

14 March 2016

160314 Money Laundering AH - Image 1

Is money laundering for the fat cats and the drug lords, and has nothing to do with the Regular Joe and Joanna?

First, a reminder on what money laundering is: a series of processes used by criminal elements to convert or clean dirty money into clean, untraceable funds, acceptable by all. Money laundering often involves a complex series of transactions that are usually difficult to separate.

Does Money Laundering really affect us (the regular people)? Yes!

This is how it affects you, yes you sitting down here, reading this.

It destabilizes the economy and financial systems

With this extra, easy dirty money being pumped into the economy on a daily basis, you would notice that there is too much money floating around which results in price inflation of certain high value items such as house and land. Let’s say the median salary in Trinidad and Tobago is below TTD$15,000 monthly. This may qualify for a mortgage of about TT$1.1 million, yet it will be a challenge to purchase a property around this price range.

When you look at the real estate market you notice extreme prices being called for, so much so that the prices have the experts shocked at what they are seeing.

It is a known fact that money launderers are interested in purchasing luxuries or high valued properties; this will have the domino effect as a “gold rush” would start, and everyone will want part of the action, properties all over the country will start going up will be above the reach of the average person.

The result is quite clear, just look out your window you would notice that many families are suffering as they are making ends meet just to pay for rent or make high mortgage repayments due to the inflated prices.

Money laundering is a bad seed and once it’s planted and gets its roots into an economy, its fruits are a continued poison that destroy happiness, family values, love and respect. Read more…