Money laundering by sudipto


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Money laundering by sudipto

  1. 1. MONEY LAUNDERING By Sudipto Mallick Acharya School of Management, B’lore PGDM 2010-12
  2. 2. Money Laundering is the criminal practice of processing ill-gotten or “dirtymoney , through a series of transaction; in this way the funds are“cleaned”, so that they appear to be proceeds for legal activities.In Common Man’s Language:It’s a process by which money or other assets obtained as proceeds of crime areexchanged for “clean money” or other assets. Dirty Money Clean Money
  3. 3. How It Is Done??
  4. 4. Money Laundering Process Placement Layering Integration
  5. 5. PlacementThe first and most vulnerable stage is placement. The goal isto introduced the unlawful money into the financial systemwithout attracting the attention of financial institution orlaw enforcement. Ex: Dividing large amount of money into less smaller terms that are deposited directly into different bank account.
  6. 6. Layering Layering involves moving funds around the financial system, often in a complex serious of transactions to create confusion and complicate the paper trail.. Ex: Exchanging money in larger or smaller amount, or transferring funds to numerous accounts in one or more financial institutions. Acct 1, Bank C Acct Acct Acct Acct1, Bank A 1, Bank D 2, Bank B X, Bank Y Acct 2, Bank B
  7. 7. IntegrationThe ultimate goal of money laundering process is integration.Once the funds are in the financial system and insulatedthrough the layering stage, the integration stage is used tocreate the appearance of legality through additionaltransactions.Ex: Purchase or resale of real estate, investment in securities etc.Or funnel such money into various dummy firms and get repaidthrough salaries, rent, leas on non- existing assets.
  8. 8. 18/10/2009• Raj Rajanathram, a portfolio manager of Galleon group (managing $7billion assets) has caught for allegedly raising fund for a Sri lankan terroristgroup ($1.5bl).• This is the largest ever hedge fund insider case – the paper reported.
  9. 9. How to prevent?? Anti Money Laundering Laws- The Prevention of Money Laundering Act, came into effect on 1st July 2005.
  10. 10. Implementation-KYC Norms
  11. 11. World Check-BMR Advisor AML Survey 2009• 168 banks in India including PSB, Private sector and Foreign Banks.• An amount 13 times larger than the countrys foreign debt - USD 1500billion has been alleged to have been launderedby Indians in Swiss banks
  12. 12. News Paper Article
  13. 13. SELF CHECK Creating the Injecting illegal money Making a complexappearance of into the system web of transaction legality1, 2, 3 3, 2, 1 1, 3, 2 3, 1, 2 2, 1, 3 None of the above 2, 3, 1
  14. 14. ANY ?????
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