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Prosecutors uncover money-laundering operation between US and Dubai (tribunecontentagency.com)
90 points by gscott 41 days ago | hide | past | favorite | 21 comments



The article is scant on details but from the description and the “shadow exchange” nomenclature it sounds awful like they’re uncovered a hawala exchange. It’s a system as old as money transfer.

Obligatory wiki link: https://en.wikipedia.org/wiki/Hawala


Seems basically like must monetary instruments today. If I Venmo someone, no "money" is being transferred until they withdraw. We're using an intermediate broker to settle our debts, and it's very likely we'll just continue passing debt around people within that system without people withdrawing for some time.


There is no money laundering unless there is proof that a crime was committed that generated the money in question, since money laundering means "disguising the origins of the proceeds of crime". Often times the law enforcement agencies claim money laundering was uncovered, but do so in cases where there is no proof that an underlying crime was committed. Because their definition of 'money laundering' is evading financial surveillance controls, not actual money laundering.

So you get statistics being trotted out in the media like "HSBC found to launder $5 billion in criminal funds", when in fact, it's just suspected money laundering, without a criminal conviction for a crime that generated the $5 billion, and a criminal forfeiture to go along with it.

What's behind this propaganda is the economic incentives of those who work in the "AML" industry:

https://www.effectiveaml.org/the-biggest-problem-with-aml/


AML is Anti-money laundering, for those of you, like me, who didn't already know and also long for an end to acronyms that come without an opening introduction. The about-page of that magazine doesn't even bother.

Would regular readers really be offended by anti-money laundering (AML) near the top of an article? I wonder.


I thought the KYC laws were pretty strict? If a bank or another entity accepts deposits without following the appropriate KYC laws isn't that enough? Perhaps it isn't prosecuting as money laundering directly but as long as the fine/punishment is comparable.


The KYC laws are the surveillance controls I was referring to. They should be called financial surveillance laws, not anti-money laundering laws. You don't have to be found guilty of any money laundering to be found guilty of breaking so-called anti-money laundering laws.

The nomenclature would be like if there were a law requiring all communications to be routed in plaintext through a government surveillance agency, and any one breaking that law were accusing of violating "anti-terrorist coordination" laws.


I'm unpersuaded. There are laws against breaking into cars because, you know, people steal things from cars or steal whole cars, and the purpose of the laws is to combat such theft. That is, they are antitheft laws. It is entirely possible for someone to break into a car and be arrested under those antitheft laws without actually stealing anything. That is still legit. People should not break into cars and there should be laws against it, even if for some ideological reason you decide to call those laws something other than antitheft.

You are coming across as playing word games to make shady operators sound sympathetic. Yes, hawala networks have been around forever. These days they are subject to the same laws as anyone else, and the legitimate ones are able to perform their obligations. The ones that don't, get in trouble as they should.


The law against breaking into cars is often called a vehicle tampering law, but even when it's labelled an anti-burglary law, there is a much stronger connection between that act and burglary, than between the act of evading surveillance controls and money laundering.

The latter is tantamount to the argument that "you wouldn't worry about surveillance if you had nothing to hide". That is, equating the desire for privacy with the intent to commit crime. My 'anti-terrorist coordination law' analogy applies.


Privacy of communications is one thing but I don't support the Citizens United decision that money is speech. Money represents public obligations, so financial transfers are not entitled to anywhere near the level of privacy as speech is.

I'm all in favor of locking up large scale tax evaders, which is what this is really about. I'd agree that seeing terrorists everywhere is mostly a red herring.


Strongly disagree. Money is just another of many types of private interactions, but one that is especially intimate and important. If you don't have privacy in money, you don't have meaningful privacy.

Justice Douglas, in his dissenting opinion on the 1974 California Bankers Association v Shultz case that upheld the constitutionality of the Bank Secrecy Act, provided an excellent argument against warrantless mass-surveillance of monetary transactions:

It is estimated that a minimum of 20 billion checks - and perhaps 30 billion - will have to be photocopied and that the weight of these little pieces of paper will approximate 166 million pounds a year. 6

It would be highly useful to governmental espionage to have like reports from all our bookstores, all our hardware [416 U.S. 21, 85] and retail stores, all our drugstores. These records too might be "useful" in criminal investigations.

One's reading habits furnish telltale clues to those who are bent on bending us to one point of view. What one buys at the hardware and retail stores may furnish clues to potential uses of wires, soap powders, and the like used by criminals. A mandatory recording of all telephone conversations would be better than the recording of checks under the Bank Secrecy Act, if Big Brother is to have his way. The records of checks - now available to the investigators - are highly useful. In a sense a person is defined by the checks he writes. By examining them the agents get to know his doctors, lawyers, creditors, political allies, social connections, religious affiliation, educational interests, the papers and magazines he reads, and so on ad infinitum. These are all tied to one's social security number; and now that we have the data banks, these other items will enrich that storehouse and make it possible for a bureaucrat - by pushing one button - to get in an instant the names of the 190 million Americans who are subversives or potential and likely candidates.

It is, I submit, sheer nonsense to agree with the Secretary that all bank records of every citizen "have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings." That is unadulterated nonsense unless we are to assume that every citizen is a crook, an assumption I cannot make.

Since the banking transactions of an individual give a fairly accurate account of his religion, ideology, opinions, and interests, a regulation impounding them and making them automatically available to all federal investigative agencies is a sledge-hammer approach to a problem that only a delicate scalpel can manage. Where fundamental personal rights are involved - as is true when as here the [416 U.S. 21, 86] Government gets large access to one's beliefs, ideas, politics, religion, cultural concerns, and the like - the Act should be "narrowly drawn" (Cantwell v. Connecticut, 310 U.S. 296, 307 ) to meet the precise evil. 7 Bank accounts at times harbor criminal plans. But we only rush with the crowd when we vent on our banks and their customers the devastating and leveling requirements of the present Act. I am not yet ready to agree that America is so possessed with evil that we must level all constitutional barriers to give our civil authorities the tools to catch criminals.

Instituting mass surveillance of monetary transactions creates extreme centralizations of power.

>>I'm all in favor of locking up large scale tax evaders,

I think if a tax requires monitoring every one's private interactions to effectively enforce, that tax should be abolished.


They know, thanks to NSA, but don't want to reveal that in court.


> evading financial surveillance controls

Isn't evading financial surveillance controls a crime?


Yes, but the money isn't generated from that crime. The question is not whether a crime occurred. The question is whether money laundering occurred.


From wikipedia for money laundering:

> Today its definition is often expanded by government and international regulators such as the US Office of the Comptroller of the Currency to mean "any financial transaction which generates an asset or a value as the result of an illegal act", which may involve actions such as tax evasion or false accounting.


I contend that this definitional expansion is misleading, as it associates crimes with unrelated concepts in people's minds.


With no actual people or companies named, arrested, or indicted. It's all just fluff on an asset forfeiture case.


Of course, they just want to keep the money. And haven't arrested or charged anyone of doing anything wrong.


> armored vehicles for an illegal drug trafficking operation based in Michigan

Pictures please!


Judging from the amount of money they seized it's pretty minor one.


I thought you were supposed to use bitcoin for this type of illegal activity... /s


Monero*




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