Money laundering practices
Since buying properties with cold cash or depositing bagfuls of cash in the local banks elicit suspicion, the launderer usually has to look for banks outside his locality where bank secrecy law is at its finest. He cannot keep the cash in his house because once he is detected by a lawbreaker, he cannot live longer than 24 hours. There had been so many cases already here in the Philippines where legitimate winners of lotto were killed. That’s why winners are never divulged by the Philippine Charity Sweepstakes Office, the operator of lotteries.
Money launderers adopt techniques in order to avoid being suspected. One of them is to buy lottery tickets and let people know that they won. Others move their cash from one place to another so that determination of the source would not be easy to trace. Still, others resort to opening up a retail establishment where sales are on a daily basis. Even without the actual sales, he can claim that his business is doing good inasmuch as he has plenty of cash to show in his cash register.
Laundering by public officials prospers by means of buying properties through dummies with the connivance certainly with some accomplices and depositary banks. The “hot” cash in their possession must be converted into cool assets. Speaking of banks where secrecy law is very strict, the US Drug Enforcement Agency mentioned Hongkong, Singapore, Panama and Switzerland, as money laundering centers of the world. There are hundred of banks and quasi-banks in these countries and exchange of money is not controlled.
The ways to prevent money laundering
Well, the best way to prevent money laundering is to elect clean, honest, dedicated, and God-fearing leader. But, it is very difficult to have one. Practically, all candidates promise during campaign periods that they will not allow their administrations to be tainted by graft and corruption. So, the electorate picked one of them. The first hundred days in office seem to be favorable to the nation. On the third year, rumors start to creep, until finally the “good” leader suddenly contracted amnesia. He could no longer remember his promise.
The government should employ sound deterrent methods to avert money laundering. The government may require lottery operators to report those who are very “lucky” individuals who always win major prizes.
The government also should police private banks to report individuals having big deposits suspected to be coming from illegal sources. When a variety store owner, for example, deposits large sums of money everyday claiming that those come from his daily sales, is it not quite doubtful when his shop is just measuring 100 square feet? But this would depend on the bank secrecy law of that country. In the Philippines, it is difficult because our Privacy Law protects our depositors. Furthermore, banks should be required to exercise controls over foreign exchange in order to prevent illegal transfers of funds.
Finally, the banks should be authorized to freeze deposits of large depositors, but this can be done only by means of a lawful court order. It is a worldwide knowledge how the assets of the late President Marcos were frozen by the banks, not only here in the Philippines, but also in foreign banks. When the late President Cory Aquino took over, she created the Philippine Commission on Good Government whose primary function was to sequester Marcos’ wealth. That is history.