Please Respond the below statement
200 words and reference ; Sub: Forensic Accounting . Starting I agree or disagree the statement.
Money laundering is the process of transforming the process of a crime into ostensibly legitimate money or other assets. A more famous case of money laundering is with Chicago gangster, Al Capone. It is estimated he laundered up to $1 billion through various fronts (Nathan, 2018). Because this is such an interesting topic, there have been many television shows dealing with this topic. One notable show is Ozark, among others. This show tells the story based on the informant who is physically doing the laundering for the criminal gang.
Money laundering takes place in three stages. First is the placement stage, then the layering stage, and lastly, the integration stage. Placement is the movement of cash from its source and then putting the cash into the circulation of a legitimate business. The layering stage makes the trailing of illegal gains harder for law enforcement agencies to track. In this stage, cash can be converted into items like money orders or can be used to purchase assets for resale. Lastly, during the integration stage, the identification and detection of the laundered funds are provided through informants. This is where the money gets back to the criminals through seemingly legitimate sources. Some methods of this are property dealings, front companies, automobile purchases, or false transactions among many other examples. These dealings are ways the launderer can gain use of their illegal gains without drawing too much attention to themselves (About Business Crime Solutions Inc., 2017).
Money laundering can be prevented with improved technology searches and the used of AI to constantly search through transactions without having someone physically going through all of them. It also saves time for employees to do their jobs. Data analytics is a good way to monitor transactions and trends within the business. Another way of preventing money laundering is regular cross-communication with different departments and even with a variety of law enforcement agencies in order to stay ahead of new methods of money laundering that may be out there. Training is also essential in any case of fraud, but in money laundering as well. If an employee does not know what they are looking at or for, there is more susceptibility for fraud. Having a sound accounting system also helps combat fraud and money laundering as well. Expanding technology into the accounting system would help standardize the accounting process leaving very limited opportunities to launder money without proper documentation and bypassing the checks and balances of the business (Thomson Reuters, 2019).
References
About Business Crime Solutions Inc. (2017). About Business Crime Solutions Inc. Retrieved from Money Laundering: A Three-Stage Process: https://www.moneylaundering.ca/public/law/3_stages_ML.php
Nathan, G. G. (2018, March). Geoffrey G. Nathan Law Offices. Retrieved from 10 Biggest Money Laundering Schemes In History: https://www.geoffreygnathanlaw.com/topics/biggest-money-laundering-schemes-in-history/
Thomson Reuters. (2019, July). Thomson Reuters. Retrieved from Five ways to help comat money laundering: https://legal.thomsonreuters.com/en/insights/white-papers/combating-money-laundering-five-ways-to-help
Please Respond the below statement
200 words and reference ; Sub: Forensic Accounting . Starting I agree or disagree the statement.
This week’s forum has everything to do about money laundering. First and foremost, we have to define what money laundering is. According to Chen (2020), “money laundering is the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source” (p. 1). In other words, the money was from illegal activities which make it “dirty.” Money laundering is a way to “clean” it so it can’t be traced.
There are three main phases of money laundering. They are as follows;
- Placement
- Layering
- Integration
Placement takes the “dirty” money and puts it into the legitimate financial system. Layering conceals the source of the money through a series of accounting and bookkeeping tricks and hacks. Integration take the newly laundered money withdrawn from a legitimate account to be used for whatever purposes the criminals had in mind for it. The biggest cases of money laundering often involve “fronts.” This is normally a business owned by the criminal or an ally of the criminal who helps to funnel the money where it needs to go, with obviously whoever helps along the way takes a cut for themselves too. Some of the best things that can help prevent money laundering are using data analytics to find patterns in the books. They can also make sure they have the most up to date system that helps to detect fraud. Above all training in how money laundering is changing is the most important.
I’ve been interested in this aspect of forensic accounting for a while since the hit television show “Ozark” took off! The plot of this show is centered on money laundering. Fraley () states the following;
The fast-paced plot follows the Byrde family, led by financial advisor Marty (Jason Bateman) and political campaigner Wendy (Laura Linney), who are forced to leave Chicago and go on the lam in the Ozarks when a money laundering scheme goes south, putting them under the thumb of a Mexican drug cartel and under the scrutiny of the FBI.
What makes it equally fascinating is the lengths that producers went to make sure that what they were portraying in the series was as accurate as possible. They even enlisted the help of the Federal Bureau of Investigations to learn the money laundering process. I also ran across another article that may show some validity to the rumors of whether or not this show was based off an actual crime in Lake of the Ozarks. In 2012 a man named Eddie Maher, “Fast Eddie to the crime syndicate, turned himself in to local police stating he had stolen over 1.6 million dollars overseas. He was a British fugitive who evaded capture by hiding he and his family in the Ozarks for over nineteen years! (Bates)
In conclusion, I think its safe to say that money laundering is a complex process that could throw a lot of kinks into the system. It can be prevented but criminals do find ways to manipulate the system. Always staying up the date on all changing aspect of the job of forensic accounting is the most important thing to do!
References
Bates, C. (2017). “Eddie Maher: How I took my family on the run for 19 years.” Accessed on 19 May 2020. Retrieved from https://www.bbc.com/news/magazine-39849458.
Chen, J. (2020). “Money Laundering.” Accessed on 19 May 2020. Retrieved from https://www.investopedia.com/terms/m/moneylaundering.asp.
Fraley, J. (2020). “Why ‘Ozark’ is the best show on Netflix.” Accessed on 19 May 2020. Retrieved from https://wtop.com/entertainment/2020/05/why-ozark-is-the-best-show-on-netflix/.
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