and are sold by street vendors and discount shops. 4. The United Arab Emirates, with its capital of Dubai, is one of the
HOW MONEY LAUNDERING WORKS
ÒThe drug landscape in the United States has shifted, with the opioid threat – including controlled prescription drugs, fentanyl and other synthetic opioids, and heroin – reaching epidemic levels and impacting significant portions of the United States.Ó
ÒWithout the overheads of the licit products, these counterfeits can be priced extremely competitively while remaining vastly more profitable. Due to this competitive edge, in some markets in some parts of the world, counterfeit products are far more common than the originals.Ó
Ñ U.S. DRUG ENFORCEMENT ADMINISTRATION, 2017
ÒI had a guy in a nearby village, and he was looking for the girls for me. He was asking for 500 euros [about $750 at the time] per girl. … In the worst night, a woman would make you 300 euros. There were some nights when a woman made 1,500 to 2,000 euros.Ó Ñ CONVICTED SEX TRAFFICKER, U.S. STATE DEPARTMENT REPORT
Ñ UNITED NATIONS OFFICE ON DRUGS AND CRIME
to UNITED STATES
CANADA
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STREET-LEVEL CRIMINALS Low-level criminals conceal their illegal income by avoiding the banking system and paying cash for luxury items, gambling and lavish lifestyles. They escape scrutiny by renting houses and leasing cars in other peopleÕs names. Criminals take advantage of the fact that cash transactions of less than $10,000 do not have to be reported on a Currency Transaction Report to the federal government.
MONEY LAUNDERING The goal of money laundering is to hide ill-gotten gains from law enforcement. Criminals use various schemes to avoid creating money trails that draw the attention of authorities. Techniques range from the simple to the sophisticated. Low-level criminals escape scrutiny by paying cash for their living expenses and entertainment. They never put their names on a mortgage or lease. Mid-level crooks hide their money through an array of clever tricks, from using prepaid debit cards to stashing cash in offshore banks. Large organized crime groups use shell companies and legitimate front businesses to convert, or Òclean,Ó their dirty money. Some take advantage of virtual currency, which is unregulated and permits anonymous transactions.
MID-LEVEL CRIMINALS
LARGE SCALE
Criminals with higher levels of illegal income conceal it in several ways. ÒStructuringÓ is when they make a number of cash deposits of less than $10,000 each in one or multiple banks for withdrawal later. They also hide their money using foreign currency brokers or exchangers, issuers of travelerÕs checks and money orders, and money transmitters.
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UNITED STATES
MEXICO
Large organized crime groups with hundreds of thousands or millions of dollars to conceal use more complicated strategies to launder their money.
ITALY
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Some stash their cash in offshore or foreign bank accounts to conceal it from U.S. taxation. They use credit cards, prepaid debit cards and wire transfers to access their money. Still others buy and quickly cash in chips at casinos and deposit money at Nevada sports books.
BULK CASH SMUGGLING Criminals smuggle large amounts of illegal cash across a national border, such as from the United States to Mexico, to avoid financial regulators and law enforcement agencies.
SHELL COMPANIES A shell company Ñ one that has few assets or business operations Ñ is used to conceal the sources of illicit cash, allowing criminals to withdraw money or make purchases.
FUNNEL ACCOUNTS Criminals make cash deposits of less than $10,000 in a bank branch in one geographic area so that others may withdraw the money from a branch in a different geographic area with little time passing between the deposits and withdrawals.
TRADE-BASED LAUNDERING A business deposits illegal cash in its bank account and uses falsified invoices to cover up where the money came from.
FRONT BUSINESSES
VIRTUAL CURRENCIES
Criminals commingle money from illegal activities with funds from a legitimate business to hide the origins of the illicit cash. Front businesses often are those that handle a lot of cash such as bars and restaurants.
Virtual currency is increasingly popular with criminals because it is unregulated and allows goods and services to be bought and sold anonymously and without paying taxes. The best-known virtual currency is Bitcoin, a so-called ÒcryptocurrencyÓ that has legitimate uses but can be exploited by criminals for black market transactions.
SYNTHETIC OPIOID TRAFFICKING China is the worldÕs top producer of fentanyl, a powerful synthetic opioid drug 50 times stronger than heroin and linked to the recent surge in overdoses in the United States. ChinaÕs fentanyl producers typically sell orders over the Internet and they are delivered mostly by mail.
1 Chinese chemical factories mail powdered fentanyl with pill presses to the United States and Mexico, where it is mixed with heroin for injection or in pill form.
2 Chinese-made powdered fentanyl arrives in Mexico, where it is mixed into counterfeit prescription pills and smuggled into the United States.
3 Authorities believe fentanyllaced pills are smuggled into the United States through Texas.
4 Ohio and West Virginia have recorded the highest concentration of opioid-related overdoses in recent years.
5 Chinese-made fentanyl is mailed to Canada and sold in pill form for the Canadian market.
PRODUCT COUNTERFEITING Sales of counterfeit and pirated merchandise make up the worldÕs largest crime racket at an estimated $1 trillion in revenues per year. Two-thirds to threequarters of these faked goods — from faux designer watches, jewelry, shoes, garments and handbags to electronics, DVDs, toys, food, cigarettes and pharmaceuticals — are made in China. Organized crime groups around the world are involved in the counterfeit market.
1 Factories in China manufacture thousands of tons of ÒknockoffsÓ of copyrighted products to be sold at deep discounts.
2 Many of these counterfeit products are exported by Chinese Triads to the port of Naples, where the Camorra crime group affixes counterfeit labels and readies them for export.
3 The phony merchandise is distributed to European nations and are sold by street vendors and discount shops.
SEX TRAFFICKING About 4.5 million women, men, girls and boys are trafficked each year for commercial sexual exploitation, a $99 billion global industry. Thailand is the worldÕs top international transit center for trafficked women and girls. Japan is the racketÕs major feeder market.
1 Thousands of women, girls, men and boys from Myanmar, Laos, Cambodia, southern China and elsewhere in Asia are trafficked into Thailand, along with ethnic Thais.
2 Victims Ñ mostly women and girls Ñ are shipped to Japan to work as prostitutes in Òsex toursÓ for Japanese men. The Japanese Yakuza collaborates with Chinese Triads and Russian organized crime.
3 Woman and girls from Thailand are also sent south to Malaysia, Indonesia and Singapore.
4 4 The United Arab Emirates, with its capital of Dubai, is one of the worldÕs top transit countries for counterfeit products ranging from designer handbags and watches to sunglasses and auto parts.
Traffickers in India lure, force Ñ and even purchase Ñ women and girls, many from Nepal and Bangladesh, to work in brothels in Mumbai and other cities.
