about financial crime

3. Who launders money?

The simplistic answer to this question is that criminals launder money. But that answer is far too simple to be completely true. The fact is that money launderers are to be found in all walks of life, many acting entirely innocently.

Published 1996

However, anyone who helps a criminal to launder the proceeds of his crime is, in most jurisdictions, also a money launderer.

This means bankers, lawyers, accountants, car dealers and others are money launderers if they allow their businesses to be used by someone else to launder the proceeds of a crime.

Generally, the only defence is that the businessman was unaware of what was happening. But this will often by difficult to prove – and in most common law jurisdictions, the burden of proving his innocence passes (either because of an express provision in the law or because of a presumption raised by facts produced in evidence) to the defendant.

In many countries, people other than the businessmen and the criminals themselves can become money launderers either by having possession of the proceeds of a crime or assets that represent the proceeds of crime. The most striking example of this is the wife or girl-friend of a criminal who knows or suspects that her husband or boyfriend uses proceeds of criminal conduct to buy their homes, cars or even jewellery. The traditional gangster’s moll with expensive baubles lent to her would today often be regarded as a money launderer.

The final class of money launderer is the person who helps to create the scheme, even if he does not actually take part in it. So an accountant who recommends a tax evasion (c/f avoidance) scheme is himself a money launderer.

Now, around the world, laws are being enacted to bring car dealers, auctioneers, casino operators, jewellers and others who deal in high value goods within the systems that require the identification of customers in many cases. This means that those businesses are required to train their staff in relevant law and measures to detect and deter money laundering.