By

Akash Jindal
 Money laundering can be described
as the process by which a person
conceals or disguises the identity or
the origin of illegally obtained
proceeds so that they appear to
have originated from legitimate
sources.
 The financing of terrorism can be
described as the process by which a
person tries to collect or provide
funds with the intention that they
should be used to carry out a
terrorist act by a terrorist or a
terrorist organization
 exploit economic and financial globalization
 have serious social consequences
 provide drug traffickers
 grow organized criminal groups
 grow arms dealers and other criminals
 strike at the integrity of a country's financial
institutions.
 It distorts the operation of markets transactions
Tax
Integration
Placement
Layering
Heavens
Flight Capital
 Placement Layering
Getting Currency into the The movement of funds
financial system so as to from institution to
convert illicit funds from institution to hide the
cash straight into a source and ownership of
financial instrument or the funds, obscure the
bank account audit trail and sever the
link with the original
crime
Integratio
The n
reinvestment of
those funds in an
ostensibly legitimate
business so that no
suspicion of its origins
remains and to give the
 Placement Layering Integratio
• Smurfing
• Tax Havens & •nUse of haven
• Shipping Money Offshore Banks bank credit cards
Abroad • Receiving as
• Bank Secrecy
• Placement Law as a layering consulting or
directors fee
through Banks tool
• Arrangement of
• Use of “Pass • Corporations & corporate loans
Through” or Shell Companies
• Proceeds of
“Payable as a layering tool
gambling
Through”
• Use of trusts • Real estate
Accounts
• Use of walking transactions
• Electronic Wire
accounts • Stock Purchase
Transfers
• Establishing self • Use of business
• Insurance
owned bank • International
Products
• Use of importing and
• Investment exporting
 Acceptance of flight capital by western countries
 Laws and limitations of other countries

 Jurisdictional conflicts and lack of international

coordination
 Tax heavens as sanctuaries
 Offshore corporations
 Having to prove fraudulent transfer
 Bankings’ role in facilitation of the activity
 Bank Secrecy
 Volume and complexity of international
transfers of funds
 Internet based banking
 Shortfall of reporting requirements
 Criminals influencing Government and
Bank support
 The widespread use and acceptance of
trade mis-pricing
 Bulk e-mail Inventions / Patents

Multi Level Marketing Vanity Press Publishing

Vending Machines Franchises

 Bank Fraud Business Loans Internet Services

Cheque Fraud Counterfeiting Cramming

Fake Ads & Directories Fraudulent Orders Supply Scams

A money launder's objective in
laundering ill is to : Get it out; cover it
up; bring it back
Contribution by different continents in ML(IMF
report data, year 2008)
Contribution by financial sector in ML (IMF report data, year
2008)
 'money
transfer without money
movement‘

 was developed in India

 Also
known as chop, chit , flying
money and underground bank
• Inspector Raj
• Dual Responsibility
• Undue Delay in Processes
• Excessive intervention by Judiciary
• Very less time in law making
• Considering of problem rather than cause of the
problem
• More interest before investigation but no interest in
concluding the cases
• Understand the need for creation / modification of laws to curb /
eliminate opportunities for scams / frauds based on the study
of global scenario
• Ensure appropriate powers to law enforcement agencies
• Provide facility for 2/3 levels of appeal before any one approach
the judiciary
• Ensure time bound completion for the cases / designating case
officer
• Announce very severe punishment for committing the crime
• Introduction of Compulsory Operations Audit on a periodical
basis
 Utilize services of professionals such as
Chartered Accountants, Advocates &
Company Secretaries for conducting pre-
enquiries with regard to various indicators
available from news media

 Be independent from every business not only

on paper but otherwise