Money Laundering, Terrorist Financing and Financial Crime
Saturday, December 17, 2022
DID YOUR NEW CHINESE CLIENT FUND HIS ACCOUNT WITH LAUNDERED COCAINE PROFITS FROM AMERICA?
If you have been following the news, you know that US law enforcement has focused upon what I can only describe as the Chinese Black Market Peso Exchange. Mexican cartels, needing to convert cocaine sales profits earned in America, have turned to a Chinese money laundering pipeline that can solve their problem. Pay attention, please; The devil is in the details.
1. Cocaine profits earned by the Cartels on the streets of the United States are turned over to the Chinese laundrymen in any one of our country's densely populated Chinatowns. 2. The Mexican branch of the Chinese organization then disburses Pesos to the Cartel down South. Consider this operation the BMPE with Hawala characteristics, as funds transfers are conducted internally by the Chinese launderers off the banking grid, through alternative and unconventional techniques. 3. Wealthy Mainland Chinese who desperately want to move their funds abroad, face serious currency controls regarding US Dollars. They turn to the Chinese laundrymen, much as the Colombian businessmen, who need Dollars to purchase goods in the U.S, do. 4. the Mainland Chinese turn over their Chinese currency inside China to the laundrymen's rep there, and they later receive dollars within the Continental United States. It's merely a variation on the old BMPE, but without Panama. 5. The Chinese organization, using their own version of Hawala, executes the appropriate transfers among their members in the USA, China, and Mexico. 6. When the Mainland Chinese clients arrive in the US, they receive the Dollars that they need to place wealth outside of the reach of China. Of course, they are receiving laundered criminal proceeds, cleaned drug profits.
WHY IS ALL THIS IMPORTANT? If you are a compliance officer at a major US Financial institution, which accepts substantial cash deposits from Chinese nationals, as new clients, you need to know:
(A) What is the Source of Funds? Given that it is illegal to move large amounts of US Dollars abroad, exactly how did the new client acquire all those greenbacks? The answer may disqualify the individual then and there. Otherwise, can you say Willful Blindness three times?
(B) What is the Source of Wealth? Can the client give you details obit how he or she earned that money? Is it the proceeds of Corruption, white collar crime, or some other illegal enterprise? You need to be extremely careful, lest you accept dirty money.
Unless the new clients cannot give you satisfactory answers to the above two questions, do not accept him or his money. I don't care what the people in New Accounts want, it's your neck if it turns out you facilitated the Chinese Variation of the BMPE.