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Cash Connection: Organized Crime, Financial Institutions, and Money Laundering

NCJ Number
166517
Date Published
1984
Length
99 pages
Annotation
This first interim report of the President's Commission on Organized Crime examines the problems associated with money laundering by organized crime in the United States; administrative and legislative recommendations are provided, as well as suggestions for voluntary action by the private sector.
Abstract
Section One of the report details the problems of money laundering and law enforcement's response to it. The scope of money laundering is evidenced by the broad array of participants. Although it is difficult to determine exactly how much money is laundered annually, tracing the cash flow between the United States and foreign countries provides an indication of the level of laundering activity. The primary tool now used to detect, measure, and punish money laundering is the Bank Secrecy Act. This act requires that a Currency Transaction Report be filed by financial institutions whenever a currency transaction is more than $10,000. In addition, a Currency or Monetary Instrument Report must be filed whenever currency or monetary instruments of more than $5,000 are taken into or out of the United States. Finally, a Foreign Bank Account Report is required whenever a person has an account in a foreign bank of more than $5,000. Although the Bank Secrecy Act has provided an effective way to deter the activities of money laundering, its effectiveness has been limited because of problems in the means by which the act is administered and because of actions by certain financial institutions. Section Two of the report presents a number of case studies that show the diversity and magnitude of money laundering schemes. These and other case studies in the report show that although money laundering schemes may be difficult for law enforcement agencies to detect, those that involve insider collusion are the most difficult. Section Three of the report presents the Commission's administrative and legislative recommendations, as well as recommendations for voluntary action by financial institutions. These proposed voluntary guidelines for the banking community are designed to help ensure that financial institutions' internal policies do not make them easy prey for money launderers. The appendix contains the Commission's recommendation for Federal legislation, the Financial Institutions Protection Act.