Saturday, November 5, 2011


The possibility that Greece might exit the Euro-zone has, I am sure, not escaped the attention of Europe's more enterprising money launderers. As compliance officers should be fully aware, the fiscal chaos which  occurs during currency changes, presents a golden target of opportunity for laundrymen who are seeking to clean the proceeds of crime, especially since much of it is held in Euros and US Dollars.

There are two ways that financial criminals, and their advisers, could benefit in a major way from the return to the Drachma:

(1) Euros earned from criminal activity (mainly, but not exclusively, drug trafficking) could be wired into  Greek financial institutions, to be converted to local currency. We know, from similar events, that neither law enforcement nor regulators have the manpower, or political will, to vet each and every individual or entity changing money. This moves illicit funds one step further along the wash-dry-fold cycle of laundering.

(2) Bulk cash smuggling Euros, as well as stronger currencies, such as the Swiss Franc, The Pound, and the Dollar, for exchange on the "unofficial" market, in a period when the population has lost faith in the government's ability to support a local currency, could yield Drachmas for the laundryman.

Even though it appears that the chances that Greece will leave the Euro-zone have diminished, rest assured that some money launderers have already moved criminal proceeds, just in case. Laundrymen read the financial pages, too. Have you seen any strange, large transfers to Greece, from clients who have no prior history of operating there ?

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