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Money Laundering Detection Information

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Analyze the money laundering issue that caused a major scandal for the bank.

What was the problem with the AML programs? How did the regulators fail at first?

Discuss whether this bank did the right due diligence on its customers and what it could have done better.

How was management involved? How could the red flags have been ignored? What were the penalties? Were placement, layering, and integration involved in these cases? What methods of money laundering were used?

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Running head: MONEY LAUNDERING DETECTION

Money Laundering Detection
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Money laundering is termed as the act of concealing financial transactions. People and institutions carry out money laundering activities in an attempt to conceal the true origin or destination of funds (Unger, 2009). Money laundering is therefore used by individuals who are carrying out illegal activities and they want to avoid detection. Through money laundering individuals and organizations attempt to portray that money originated from a legal source. Money laundering harbors criminal activities and assists in concealing the real source of income and giving the appearance that income generated is from a legitimate source. Money laundering is mainly carried out in such a way that money is transferred through several nations and this is done in order to conceal origin (Unger, 2009).

Different countries have different laws relating to money laundering with some countries implementing reporting laws on financial transactions while others have secrecy laws (Unger, 2009). This makes it possible for an individual or institution to anonymously deposit funds in one nation and then transfer it to another nation.
Recent money laundering scandal occurred in Wachovia Bank which currently part of Wells Fargo Bank. In March 2010 it was revealed that the bank was involved in money laundering transactions for Mexican drug cartel. Money laundering activities took place from 2004 and 2007 and it is provided that the bank laundered $ 378.4 billion for the ...

Solution Summary

The solution discusses money laundering detection. An analysis of the money laundering issues that causes a major scandal for the bank are shown.

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Money Laundering Detection

You've been asked to set up internal controls for money laundering for the company that you work for. You are a bit taken aback because you didn't know that your company would need controls.

- What type of businesses are targeted for money launderers? Why?
- What exactly should you be looking for when setting up your KYC policy?
- What sort of record-keeping procedures should you develop?
- Who and how should the money laundering activity be monitored?
- How would you alert and train the staff to recognize a potential money launderer?
- What if a potential money launderer is identified?
o What should you do?
o What would you tell the staff to do?
o What time frames would you put in place?
o What regulator (s) would be involved?
- If you are ever audited by a regulator, what will you be able to show them?
- The internal controls should be written as procedures for the entire staff. Include forms you would ask the staff to use and other documentation that you know would be necessary to produce when you are audited.

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