The new face of money laundering

Abstract

According to legend, the fall of Troy was accomplished by a clever ruse. After 10 years of unsuccessfully dashing themselves against the impregnable walls of Troy, the Greeks pretended to give up and sail away from the besieged City, leaving behind a giant, hollow wooden horse. The Trojans, considering the wooden horse to be symbolic of their hard‐earned victory, demolished the walls that had protected them for so long and triumphantly wheeled the horse inside their city. Only a handful of the jubilant Trojans suspected that there might be something wrong. One of them, supposedly the high priest, is said to have muttered the memorable phrase as the horse was pushed and dragged into Troy, “Whatever that thing is, I fear the Greeks bearing gifts.” Fateful and prescient words. That night, as the reveling Trojans slept, Greek soldiers poured out of the hollow wooden horse and the fall of Troy was at long last accomplished. The modern world has its counterpart to the lesson of Troy: money laundering. And the results can be equally as devastating to the modern business person: loss of reputation, draconian fines, bankruptcy, imprisonment. Once let a money launderer, the modern equivalent of the Trojan Horse, into a business without heeding the warning to “fear the Greeks bearing gifts” and this can be the result. It is not so long ago that money laundering was relatively easy to recognize. It involved scruffy looking characters delivering hordes of cash in cardboard boxes, paper shopping bags, duffel bags, suitcases and the like. More often than not, the delivery persons had not even counted the hundreds of thousands of dollars in cash they were delivering. Receipts never were expected. A classic example is the Miami bank in which over $242 million in cash was deposited into one checking account in one branch in the space of eight months, all in cash and all delivered to the bank in precisely the manner just described. In that case, the cash poured in so quickly that the bank itself limited the amount of cash it would accept ‐ to no more than $2 million per day.