Acc 325 - Chapters 10 & 11

Front 1

Money laundering

Back 1

The process by which one conceals the existence, illegal source, or illegal application of income and then disguises that income to make it appear legitimate

Front 2

Benefits of money laundering investigations
(6)

Back 2

1. substantial prison time for white collar criminals (10-20 yrs)
2. seized and forfeited assets
3. prosecution of untouchables
4. aditional opportunities for search warrants
5. better informants
6. great alliances (between local and state law enforcement agencies)

Front 3

Noncurrency transactions

Back 3

Personal or business checks, cashiers checks, money orders, other negotiable instruments and credit or debit cards

Front 4

Advantages of conducting currency transactions
(3)

Back 4

1. currency is universally accepted as payment for g&s
2. currency's anonymity results in a lack of records or none at all
3. unreported revenues are not taxed

Front 5

Disadvantages of conducting currency transactions
(4)

Back 5

1. in large amts, cash is suspicious
2. lack of records makes it difficult to prevent theft of currency
3. large amts of cash are difficult to handle and transport
4. certain assets cannot be acquired for cash without an extensive inquiry into their source

Front 6

Advantages of conducting noncurrency transaction
(5)

Back 6

1. greater efficiency and security in the transfer of funds
2. losses owing to theft are controllable
3. other business opportunities are available
4. a legitimate business is a valuable base of operations and source of cash for criminal activities
5. ownership of a business permits acquisution of community standing and influence

Front 7

Disadvantages of conducting non-currency transactions
(4)

Back 7

1. taxes must paid on reported revenues
2. business recrds are subject to examination by authorities
3. falsification of records is a criminal act and can lead to prosecution even without proof of other criminal activities
4. transactions have a source and destination which can lead to the criminal activity

Front 8

The money laundering process
(3)

Back 8

1. placement
2. layering
3. integration

Front 9

Placement

Back 9

Putting the illicit funds into the financial system

Front 10

Layering

Back 10

Funds that must be moved and broken up to hide their true origin and to suggest a legitimate source

Front 11

Integration

Back 11

The process of providing an apparent legitimate explanation for the origin of illicit proceeds

Front 12

Methods of laundering funds
(3)

Back 12

1. use of a legitimate business
2. conduct buy/sell transactions
3. use of offshore havens

Front 13

Use of a legitimate business
(3)

Back 13

1. overstatement of legitimate revenue
2. overstatement of legitimate expenses
3. deposits of currency

Front 14

Overstatement of legitimate revenue

Back 14

Illegal proceeds are added into the sales records of a legitimate business
*uses false sales invoices, phony sales invoices, and false or phony purchase invoices

Front 15

Overstatement of legitimate expenses

Back 15

Inflated expenses reduce the additional tax liability caused by inflating revenues

Front 16

Deposits of currency

Back 16

Deposit currency generated from an illegal activity directly into business bank accounts and treat it as normal business receipts

Front 17

Conduct buy/sell transactions

Back 17

1. Real and personal property transactions can be manipulated to hide the flow of illegal proceeds and provide an apparent source of legitimate income to the criminal

Front 18

Use of offshore havens

Back 18

1. moving money out of the US
2. moving money back into the US

Front 19

Moving money out of the US
(6)

Back 19

1. Physical Transportation
2. Wire Transfers
3. Cashier’s Checks
4. Money Managers
5. Attorneys/Accountants
6. Brokerage Accounts

Front 20

Moving money back into the US
(6)

Back 20

1. Physical Transportation
2. Wire Transfers/Cashier’s Checks
3. Corporate Salaries
4. Fictitious Loans
5. Fictitious Foreign Investors
6. Finders Fees

Front 21

Asset forfeiture

Back 21

A Legal proceeding initiated by the government against the proceeds of an illegal activity

Front 22

Proceeds
(df)

Back 22

Whatever is received when an object is sold, exchanged, or otherwise disposed of
*doesn't necessarily just mean momey

Front 23

To prevail in an forfeiture action, the government needs to prove...

Back 23

by a preponderance of the evidence that the property to be forfeited was acquired or used in a prohibited manner

Front 24

Meaning of preponderance of evidence

Back 24

The prevailing party's evidence carries more weight than the other party's evidence

Front 25

Factors establishing probably cause in forgeiture investigations
(4)

Back 25

1. close proximity
2. means of support
3. pre-trial statements
4. records of illegal activity

Front 26

In rem

Back 26

An in rem proceeding refers to a legal proceeding directed solely against property

Front 27

In personam

Back 27

An in personam proceeding refers to a legal proceeding directed against the felon

Front 28

Facilitation vs. Proceeds

Back 28

Read this paragraph!!!! Page 268-269

Front 29

Civil forfeiture

Back 29

Government need only show by preponderance of evidence that property involved in illegal activity.
*No criminal conviction is necessary

Front 30

Criminal forfeiture

Back 30

Government must prove by preponderance of evidence* property was proceeds of or significantly connected to illegal activity.
*Some courts have required proof
beyond reasonable doubt.
* the defendant must be convicted of the crime before the property is forfeited

Front 31

Federal forfeiture statutes
(3)

Back 31

1. 981: civil forfeiture
2. 984: civil forfeiture of fungible property
3. 982 criminal forfeiture
4. 881: forfeiture

Front 32

Developing forfeiture cases

Back 32

Starting point is the paper trail

Front 33

Key of forfeiture cases

Back 33

Key is to discover factors that establish property used or acquired in a prohibited manner.

Front 34

Forfeiture as excessive fine

Back 34

Forfeiture cannot be grossly disproportionate to underlying offense.

Front 35

Summary of asset forfeiture
(2)

Back 35

1. Allows law enforcement to take profit out of crime.
2. Accomplished through relatively straightforward modes of proof.