Your local drug dealer has the greatest need to launder mon
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Your local drug dealer has the greatest need to launder money. Drug dealers need to launder a lot of cash, but there are many safeguards in the system these days, which raise red flags on large cash deposits. That's why one of the most common methods is to use what appears to be a legitimate business as a front. Knowing what you know about the U.S. Patriot Act, the BSA, FinCen, and the OCC, how would you help your local bank train its employees to look for small businesses being used to launder money?
Discuss the type of customer identification program you would put into place and the type of due diligence you would recommend. How do you think the smart drug dealer would get around this?
If the bank slips up and does indeed open an account for a small business that is a front for a drug dealer, what sort of methods will the dealer use to deposit the cash and withdraw it without raising suspicion?
Find an example of a bank that was penalized for allowing a small business to act as a front for money laundering.
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Solution Summary
Your local drug dealer has the greatest need to launder money. Drug dealers need to launder a lot of cash, but there are many safeguards in the system these days, which raise red flags on large cash deposits. That's why one of the most common methods is to use what appears to be a legitimate business as a front. Knowing what you know about the U.S. Patriot Act, the BSA, FinCen, and the OCC, how would you help your local bank train its employees to look for small businesses being used to launder money?
Discuss the type of customer identification program you would put into place and the type of due diligence you would recommend. How do you think the smart drug dealer would get around this?
If the bank slips up and does indeed open an account for a small business that is a front for a drug dealer, what sort of methods will the dealer use to deposit the cash and withdraw it without raising suspicion?
Find an example of a bank that was penalized for allowing a small business to act as a front for money laundering.
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The best way to train employees to look for businesses that are laundering money is to train the employees to watch for specific key signs of money laundering. One of the main signs is when people make a large amount of deposits, oftentimes making multiple deposits every day, or every two days. The drug dealer does not want to hold onto the physical cash for more than a few days, in case he or she is caught in the illegal activity. They want to get the money into the bank as quickly as possible, as a way to safeguard the money. One of the other key signs of money laundering, particularly if it is accompanied by a large amount of deposits, is when customers must frequently get change for large bills, in order to give customers change. This is particularly concerning when the customer does not operate in a business ...
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