Customers typically use cash to purchase drugs from street-level drug dealers, who in turn use cash to purchase their drug supply from mid-level distributors. Drug trafficking, however, is probably the most significant single source of illicit cash. Criminals regularly attempt to smuggle bulk cash across the United States’ borders using these and other methods.Ĭash-intensive sources of illicit income include human smuggling, bribery, contraband smuggling, extortion, fraud, illegal gambling, kidnapping, and prostitution. Additionally, despite its bulk, cash can be easily concealed and transported in large quantities in vehicles, commercial shipments, aircraft, boats, luggage, or packages in special compartments hidden inside clothing or in packages wrapped to look like gifts.
CASH MONIES PORTABLE
Cash is anonymous, fungible, and portable it bears no record of its source, owner, or legitimacy it is used and held around the world and is difficult to trace once spent. Illicit Cash: Cash transactions are particularly vulnerable to money laundering. Some of the more well-known methods of money laundering are described below. Those methods range from well-established techniques for integrating dirty money into the financial system, such as the use of cash, to more modern innovations that make use of emerging technologies to exploit vulnerabilities. Once criminal funds have entered the financial system, the layering and integration phases make it very difficult to track and trace the money.Ĭriminals employ a host of methods to launder the proceeds of their crimes. Money laundering generally involves three steps: placing illicit proceeds into the financial system layering, or the separation of the criminal proceeds from their origin and integration, or the use of apparently legitimate transactions to disguise the illicit proceeds. Money laundering involves masking the source of criminally derived proceeds so that the proceeds appear legitimate, or masking the source of monies used to promote illegal conduct. This is why criminals resort to money laundering. Without usable profits, the criminal activity cannot continue. However, for an illegal enterprise to succeed, criminals must be able to hide, move, and access the proceeds of their crimes. Office on Drugs and Crimes estimates that annual illicit proceeds total more than $2 trillion globally, and proceeds of crime generated in the United States were estimated to total approximately $300 billion in 2010, or about two percent of the overall U.S. This hearing is an important step forward toward strengthening these laws, and the FBI appreciates being consulted on these incredibly important matters. Chairman Crapo, Ranking Member Brown, and members of the committee, I am pleased to appear before you today to discuss our nation’s anti-money laundering (AML) laws.
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