The Genesis of “Money Laundering”! 

In the field of Financial Crime Risk, operations, compliance, management, detection, investigations and prevention, the Professional Anti Money Laundering (AMl) specialists and crime professionals have failed to agree when or where the concept and act of “money laundering” came from or invented! Some have argued that AML was not invented during the Prohibition era in the United States, but many techniques were developed and refined then. Many methods were devised to disguise the origins of money generated by the sale of then illegal alcoholic beverages. Many have Followed Al Capone’s 1931 conviction for tax evasion! Remember though that mobster Meyer Lansky transferred funds from New Orleans slot machines to accounts overseas. Again after the 1934 Swiss Banking Act which created the principle of bank secrecy, Meyer Lansky bought a Swiss bank where he did transfer his illegal funds through a complex system of shell companies, holding companies and offshore accounts. The term of “money laundering” itself does not derive, as is often said, from the story that Al Capone used laundromats to hide ill-gotten gains. Others have stated and categorically so that it was Meyer Lansky that perfected money laundering’s older brother, “capital flight”, transferring his funds to Switzerland and other offshore places. Yet others have argued that the first reference to the term “money laundering” itself actually appeared during the Watergate scandal. US President Richard Nixon’s “Committee to Re-elect the President” moved illegal campaign contributions to Mexico, then brought the money back through a company in Miami. It was Britain’s Guardian newspaper that coined the term, referring to the process as “laundering.” Yet still the Aml story may not be complete without the mention of one notorious character known as Pablo Escobar. The bloody leader of one of the most profitable of the Medellin drug gangs. At one time his gang was so successful that they were spending $2,500 of dollars a month on rubber bands to wrap around their bundles of cash. Corruption and intimidation characterized Escobar’s dealings with the Colombian system. He had an effective, inescapable policy in dealing with law enforcement and the government, referred to as “plata o plomo,” (literally silver or lead, colloquially [accept] money or [face] bullets). This resulted in the deaths of hundreds of individuals, including civilians, policemen and state officials. It has been well documented that Escobar bribed countless government officials, judges and other politicians! The son of a gun used banks heavily to launder his gang’s cash and it is worth remembering that money laundering represents the proceeds of some very unpleasant activities indeed and sources! Drugs, corruption, illegal arms deals and other serious predicate offenses of AML! Stay blessed!

Published by Kunda Kalaba

Financial Crime Compliance (FCC) professional. Passionate about AML/CTF, Sanctions, ABC, KYC, CDD. Member - World Advisory Council Association of Certified Fraud Examiners-ACFE. Member of the African Task Force Committee - ACAMS. Presenter at International Conferences-ACAMS&ACFE. Certified Fraud Examiner-CFE. ACFE & ACAMS Singapore Chapters Member. Certified Anti-Money Laundering Specialist-CAMS. Certified Anti-Bribery and Corruption-ABC. Chairperson, ABC Working Group. Founder - Institute of Directors (IoD) Zambia Chapter. Founder - Managerial Accountability & Transparency. Two-term of two years Chairperson of the Bankers Association of Zambia Fraud Prevention and Security Committee. Zambian Government to SADC and COMESA Consultant on Crime & Corruption Prevention & management Strategies. Sound & vast experience in FCC Compliance, Deterrence, Prevention, Detection, Investigations, Security and Prosecutions. 25 years extensive experience in FCC, ABC, AML, CTF, Fraud & Operational risk assessment & Investigations. STA in Financial Crime Compliance & Risk management in London, Coventry & Southampton in the UK. Area Head of FCC for Southern & East Africa responsible for Risk Assessments & Investigations, AML/CTF, Sanctions. Central Bank regulatory and AML Directives appointed as Country Money Laundering Prevention/Reporting Officer-CMLPO. Professionally trained “trainer of trainers” & core facilitator. Proficient with proven track record of exceptional abilities in management and leadership for performance. Corporate Governance, capacity building, Institutional & Organizational development, business process re-engineering. Technical expertise is coupled with excellent interpersonal, team building, communication and presentation skills.

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