Are you a business owner and uncertain about whether fraud applies to you or your business? Unfortunately, in Ireland and indeed throughout the world, fraud is a serious problem and you are often legally liable for acts committed in your business or by your employees.

Do you work with goods, services or the buying or selling of products? Then you are legally obliged to report any suspicious transactions by customers.

Money Laundering

Definition:

The act of concealing the source of assets that have been illegally obtained. The primary objective with money laundering is to hide the source and ownership of such funds through the creation of a seemingly legitimate history or paper trail. This is not a new crime; money laundering has been around for many years, but modern technology has allowed it to proliferate.

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 was enacted into Irish law in July 2010 to update Irish anti-money laundering and terrorist financing legislation.

In summary, the Act contains requirements on the part of designated bodies covered by the legislation to:

  • Identify customers and to undertake Customer Due Diligence in business dealings
  • Report suspicious transactions to An Garda S­och¡na and the Revenue Commissioners
  • Have specific procedures in place to provide to the fullest extent possible for the prevention of money laundering and terrorist financing.These procedures relate to record keeping, staff training and the maintenance of appropriate procedures and controls pertaining to the obligations imposed by the Directive.

Fraud

The money laundering process involves the following three basic steps that, in banking parlance, are known as:

  • Placement physically placing illegal cash in banks or purchasing goods with it, such as art, precious metals, real estate, gems or jewellery etc.
  • Layering the act of separating the proceeds from their criminal origins through complex moves such as wire transfers, conversion of cash to financial instruments, sale of high value goods, and real estate investments. Offshore shell companies are a common layering tool as well. Shells obscure the beneficial owners through restrictive offshore bank secrecy laws, not to mention attorney-client privilege.
  • Integration making the wealth derived from the illicit proceeds appear legitimate. Using funds on deposit in foreign financial institutions as security for domestic loans is a favourite technique. Another ploy is over-billing or producing false invoices for goods allegedly sold across borders.
    e.g. A launderer may pay a large deposit for a job worth a large amount, i.e. car, fitted kitchen, yacht etc, then cancel the order and receive clean money as a returned deposit.

How do money launderers work?

Smurfing:

This is where large sums are split into multiple smaller transactions that may not appear as suspicious to banks and would not be reported to the authorities. Smurfs then spread out and deposit the money into accounts and this is not reported due to it being below the money laundering cut offs. i.e. In Ireland, all providers of goods, when payments are made to the provider of the goods in cash in excess of ‚€15,000 whether in one transaction or in a series of transactions that are or appear to be linked to each other.

How do I protect my business and employees from money laundering?

We at City Investigations will visit your home or office and go through all of the necessary steps that you need to take to protect yourself and also to stop your company from being part of a Smurfing racquet which causes millions in euro every year and these Smurfs are responsible for this money and proceeds going to terrorism and crime, can you afford not to know?