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World Money Laundering Report

The USA's financial crime regulator and FIU, the Financial Crimes Enforcement Network, FinCEN, has announced that it has "launched" the "Global Investigations Division" or (inevitably) "GID". It is being sold as being focussed on money laundering threats that originate abroad. But what is it really? And has FinCEN at last found its calling?

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Criminals and others who act against the interests of society at large are almost always ahead of financial crime and other risk managers when it comes to the the planning and execution of activity. Criminal and anti-social activity are magnified in relation to the effect on economies, even ultimately being an accelerant in the fires that led to the global financial crisis that only the most naive or self-centred deny is over. The fascinating thing is this: while they don't know it, the seeds of major, even pandemic, crime are easily visible. You just need to know where to look.

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The UK's Financial Conduct Authority has revealed that, in 2017, it secured the conviction for money laundering of one Richard Baldwin. However, the case was kept out of the public eye due to reporting restrictions.

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"It was the computer wot done it, guv," is the latest excuse to come out of a major bank caught with its money laundering knickers around its ankles.

There's just one incy-wincy-little point. It wasn't the software - it was the people .. and it's the same problem that makes reliance on so-called AI so dangerous, Nigel Morris-Cotterill says.

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It has become fashionable to talk of "The Three Lines of Defence" in relation to money laundering, terrorist financing, etc. Is it just more more quasi-militaristic buzzwords, so loved by Americans, and a pretence of intellect or is there genuine merit here?

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The responsible officer of a securities brokerage has been banned from the industry for ten months as a result of his "failure to discharge his duties as an RO" and a member of the company's senior management. The company has been fined a substantial amount, too.

The Law Society of England and Wales has, since the early 1990s, fought a rear-guard action against the engagement of solicitors in counter-money laundering efforts. The Regulator, which was first a division of the Law Society and then spun off to become a ludicrously politically charged enforcer of any passing social fad had, at that time the correct view that solicitors were within the scope of the original Money Laundering Regulations. At last, the regulator, now known as the Solicitors (sic) Regulatory Authority (it's so trendy it doesn't use an apostrophe where its name demands one) has decided that money laundering is something it needs to pay attention to. The Law Society is on a war footing, declaring the SRA's action "an assault."

Now here's a surprise: Australian regulator ASIC has charged (actually charged, as in criminal charges) three people with laundering the proceeds of an attempt to manipulate an insolvency. Other countries have long included insolvency offences as predicate offences for money laundering purposes: this is the first case we can think of where action has been taken.

The European Union has issued a new blacklist for money laundering. The reaction from those appearing on the list, EU members and even the FATF has been rapid and forceful: the list is not acceptable. But there is more at play, including the imposition of direct control on those conducting business in the EU, by the EU without the filter of national parliaments. This example of federalism is not going down well in several large EU states. Also, the "war on dirty money" is a convenient diversion for governments who want the media to focus on that rather than something else. Also.. it might not happen.

In what might just count as the simplest money laundering scheme ever, a senior officer of a US bank is to be banged up for two years.

In the past day or so, a company called emailmovers limited using the domain xmr3.com have sent out a number of spam e-mails addressed to personal e-mail addresses at companies. They claim "Emailmovers is one of the UK's only B2B email data owners who provide Full Email Marketing services in house" which is, in itself a nonsensical statement.

But it's their claim for how many people they feel it's OK to send unwanted commercial email to that is interesting. Just how did they get it and how do they think it's legal to use it? And is it a predicate crime for money laundering purposes if they have breached GDPR?

The increased emphasis on the true owners of companies opens up a can of worms. The lid has been loose for years but no one dared take a proper look inside. Now's the time to find out what's buried in that wriggling mass.

"Cognitive bias" is one of those expressions, along with various other forms of bias, that's become popular in recent months. However, there's nothing new and nothing clever about cognitive bias. In fact, it's one of the most fundamental aspects of decision making. We all, without exception, do it. But the problem is that it underpins one of the reasons that financial crime risk management fails, over and over again.

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A lawyer has pleaded guilty to using his clients' account to launder the proceeds of a range of financial crimes in which he also took part. The case shows why Regulations limiting suspicious reporting requirements to "transactional lawyers" are a mistake.

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