Rethinking money laundering and drug trafficking. Some implications for investigators, policy makers and researchers

Author:Melvin R.J. Soudijn
Position:CID, Woerden, The Netherlands
Pages:298-310
SUMMARY

Purpose In accordance with the literature on money laundering, policymakers and researchers often use a model which distinguishes three successive stages: placement, layering and integration. But how well does this model compare to actual investigations of money laundering in relation to large-scale drug trafficking? Design/methodology/approach The basis is formed by data collected in 2012 for that year’s crime pattern analysis (CPA) for money... (see full summary)

 
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Rethinking money laundering
and drug trafcking
Some implications for investigators, policy
makers and researchers
Melvin R.J. Soudijn
CID, Woerden, The Netherlands
Abstract
Purpose – In accordance with the literature on money laundering, policymakers and researchers often
use a model which distinguishes three successive stages: placement, layering and integration. But how
well does this model compare to actual investigations of money laundering in relation to large-scale
drug trafcking?
Design/methodology/approach – The basis is formed by data collected in 2012 for that year’s crime
pattern analysis (CPA) for money laundering and cocaine trafcking. In all, 46 structured interviews
were conducted. These interviews mostly centred around money laundering, involving the proceeds of
drugs crime. As a result of the interviews, the dossiers from 16 criminal investigations were also
obtained for further analysis.
Findings – Comparing the three-phase model with Dutch investigations on drug trafcking, three
observations can be made. First of all, cash plays a larger role than the theoretical model would suggest.
Second, the proceeds of crime are often moved abroad, circumventing the legal nancial system. And
third, money laundering often occurs in much simpler forms than the theory would lead one to suspect.
Research limitations/implications The sources mainly involve criminal investigations into
organized drug trafcking. Investigations involving white collar crime and fraud will probably
generate different outcomes. Another caveat is that the situation in other countries may differ from the
picture that emerges from the Dutch data.
Practical implications – Combating money laundering is sometimes a job for specialists, but many
forms (involving cash and moving money around) can easily be left to ordinary investigative ofcers
with no nancial background. Money laundering therefore needs to be demystied to broaden the
opportunities for investigating analyzing and researching money laundering. Furthermore, it is not
always practical to depend on Financial Intelligence Unit’s information to start an investigation or to
evaluate anti-money laundering efciency.
Originality/value – The literature on money laundering often centres around judicial system, legal
issues and theoretical solutions. Empirical data is hard to come by. This article uses information from
actual investigations to illustrate aspects of money laundering that can be overlooked.
Keywords Organized crime, Money laundering, Bulk cash smuggling, Hawala
Paper type Research paper
Introduction
Pick up any academic book or article on money laundering, and odds are money
laundering will be explained as consisting of three successive stages – placement,
layering and integration (Dean et al., 2010;Petrunov, 2011;Unger, 2007).
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
JMLC
19,3
298
Journalof Money Laundering
Control
Vol.19 No. 3, 2016
pp.298-310
©Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2015-0028

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