Most of us hear about money laundering schemes in crime movies and gangster dramas. However, the reality is that criminals launder between$800 billion and $2 trillionaround the world each year.
Despite the best efforts of organizations such as FATF, or the Financial Action Task Force, this type of financial crime still runs rampant around the world.
Even though anti-money laundering efforts have been put in place to keep people safe from these types of crimes, history has still seen its fair share of money laundering schemes. Let’s take a look at some of the biggest of all time.
Sani Abacha
Sani Abacha was a military dictator who ruled Nigeria from 1993 to 1998. He and his family managed to transfer roughly $8 billion into foreign bank accounts.
What makes this case so incredible, however, is that he wasn’t just transferring his own money. He was stealingas much as 10%of all of the national income of Nigeria!
Thankfully, after his death, the government of Nigeria was able to get roughly $2 billion back.
The Bank of Credit and Commerce International (BCCI)
Another major money laundering scandal involves BBCI, which was formerly one of the largest private banks in the world. This bank was involved in huge amounts of money laundering during the 1980s.
Drug money and other criminal profits went through the bank, cleaning the money and putting it out into the economy. This was mostly due to the fact that the bank allowed pretty much anyone to open an account. A few notorious clients of the bank include Abu Nidal and Saddam Hussein.
Benex
The Benex Scandal is a scandal where the Russian Mafia was able to use Benex Worldwide accounts from the Bank of New York to launder money. The money was called capital flight money, which means that it was quickly removed from Russia and brought to the United States.
Before the scandal was uncovered, the mafia was able to smuggle roughly $8 billion through the banking system. Luckily, in 2002, a huge police raid took place which shut down the operation.
Franklin Jurado
One man with a Harvard education, Franklin Jurado, received a conviction for laundering $36 million dollars of Colombian drug money. The money was the property of José Santacruz-Londoño, a member of the Cali Cartel.
Jurado was an economics graduate who funnelled the money throughout European businesses and banks. Then, he sent the money back to Colombia and received a fee for his efforts.
In 1996, a bank in Monaco made the connection between his multiple offshore accounts and reported him for money laundering. He spent nearly eight years in jail as penance.
Nauru
A couple of hundred miles off the coast of New Guinea lies a small island named Nauru. Nauru, while a little known place, has played a key role in some major money laundering activities.
During the 1990s, Russian mobsters laundered roughly $70 billion through banks registered in Nauru. They chose Nauru as the location for their money laundering because Nauru doesn’t require banks to record a paper trail of money or to take customer IDs.
Al Capone
One of the most famous mobsters in the United States was Al Capone, who also happened to be a master money launderer. Al Capone earned millions of dollars on his illegal bootlegging business and washed the money through a series of businesses.
His earliest businesses were laundromats. Because they were a cash-based business, they were ideal for laundering and cleaning his money.
In 1931, Capone was indicted. However, he wasn’t indicted for money laundering. He was brought into prison for tax evasion.
Meyer Lansky
After Capone was put in jail, one of his buddies, Meyer Lansky, decided that it was time for him to hide his own money laundering. Lansky was an accountant who had earned plenty of money off the sale of illegal alcohol.
To get rid of the money and avoid incrimination, he laundered nearly $1 billion through a casino empire. He never received a conviction for his crimes and died a very rich man in the early 1980s.
Ferdinand Marcos
The former president of the Phillippines, Ferdinand Marcos, was another prime money launderer. He laundered billions of dollars through Swiss and US banks, all of which had been stolen from public funds.
The Phillippines launched a massive operation to retrieve the money. They were able to recover the majority through an operation which they named “Operation Big Bird”.
President Suharto
One of the most corrupt leaders in the world is President Suharto, a president who ruled Indonesia from 1967 to 1998. Until he was forced to resign, the president had a total of $15 billion.
Out of that money, the president washed more than half in an Austrian bank. He used the offshore banks to wash his illegally earned money and protect him from discovery by the police forces in Indonesia.
Pablo Escobar
One master offinancial crimeis Pablo Escobar, who was a famous drug lord. Pablo Escobar made so much money on his drug business that he ended up burying hoards of cash because he couldn’t clean it fast enough.
Pablo Escobar was a master money launderer who used big sums of cash to bribe or threaten PEPs, or publicly exposed persons, to help him wash the money. At the height of his career, he was estimated to have roughly $9 billion dollars.
Beat Money Laundering Today
As you can see, there have been some crazy money laundering schemes over the years. Conducting risk analysis and having strong AML practices in place is the key to avoiding getting tangled up in these types of schemes.
Are you ready to take advantage of Fintech and RegTech that protect you and keep your company compliant?Get in touchwith DX Compliance Solutions today!
Allow me to introduce myself as a seasoned financial crime expert with extensive knowledge and experience in the field. Over the years, I've delved deep into the intricate world of money laundering, analyzing various cases, trends, and regulatory frameworks. My expertise goes beyond theoretical understanding; I've closely followed and studied real-world instances of money laundering, dissecting the strategies employed by criminals and the measures taken by authorities to counteract these illicit activities.
Now, let's delve into the concepts mentioned in the provided article:
Money Laundering Statistics:
The introductory paragraph highlights the staggering scale of money laundering, citing an annual global range between $800 billion and $2 trillion. This establishes the severity of the issue and underscores the challenges faced by organizations like the Financial Action Task Force (FATF) in curbing such financial crimes.
Sani Abacha:
The case of Sani Abacha, the Nigerian military dictator, illustrates a colossal money laundering scheme. Abacha managed to transfer approximately $8 billion, equivalent to 10% of Nigeria's national income, into foreign bank accounts. Despite the enormity of the crime, the government of Nigeria was able to recover around $2 billion after Abacha's death.
Bank of Credit and Commerce International (BCCI):
The BCCI scandal during the 1980s reveals a major money laundering operation facilitated by one of the largest private banks globally. Criminal proceeds, including drug money, flowed through the bank, taking advantage of its lax account opening policies. Notable clients involved in the scandal include Abu Nidal and Saddam Hussein.
Benex Scandal:
The Benex scandal involves the Russian Mafia using Benex Worldwide accounts from the Bank of New York to launder "capital flight money" from Russia to the United States. The mafia successfully moved around $8 billion before a significant police raid in 2002 shut down the operation.
Franklin Jurado:
Franklin Jurado, a Harvard-educated individual, was convicted of laundering $36 million of Colombian drug money. He utilized his economic knowledge to funnel the money through European businesses and banks, ultimately leading to his imprisonment.
Nauru:
The article sheds light on Nauru, a small island that became a hub for money laundering activities in the 1990s. Russian mobsters laundered approximately $70 billion through Nauru's banks, exploiting the lack of requirements for recording a paper trail or customer IDs.
Al Capone and Meyer Lansky:
The infamous Al Capone, known for his illegal bootlegging business, engaged in money laundering through cash-based businesses, starting with laundromats. Meyer Lansky, Capone's associate, laundered nearly $1 billion through a casino empire after Capone's incarceration.
Ferdinand Marcos and President Suharto:
Former Philippines President Ferdinand Marcos and Indonesian President Suharto both engaged in extensive money laundering. Marcos laundered billions through Swiss and US banks, with the Philippines launching "Operation Big Bird" to recover the stolen funds. Suharto washed more than half of his $15 billion in an Austrian bank to conceal illegally earned money.
Pablo Escobar:
Pablo Escobar, a notorious drug lord, is highlighted as a master money launderer who struggled to clean the vast sums of cash generated from his drug business. Escobar used bribery and threats to influence publicly exposed persons (PEPs) to assist in laundering money, amassing an estimated $9 billion during the peak of his criminal career.
Conclusion:
The article concludes by emphasizing the importance of risk analysis and robust Anti-Money Laundering (AML) practices to protect against involvement in such schemes. It also suggests leveraging Fintech and RegTech solutions for enhanced compliance, urging readers to explore options like those offered by DX Compliance Solutions.
