Financial Crimes
anti money laundering law
Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity. Three steps are involved in the process of laundering money: placement, layering, and integration. Placement refers to the act of introducing “dirty money” (money obtained through illegitimate, criminal means) into the financial system in some way; “layering” is the act of concealing the source of that money by way of a series of complex transactions and bookkeeping gymnastics; and integration refers to the act of acquiring that money in purportedly legitimate means.
One of the more common ways that laundering takes place is when a criminal organization funnels their illegally obtained cash through a cash-based business, slightly inflating the daily take. These organizations are often referred to as “fronts
Other common forms of money laundering include smurfing, where a person breaks up large chunks of cash and deposits them over an extended period of time in a financial institution, or simply smuggles large amounts of cash across boarders to deposit them in offshore accounts where money laundering enforcement is less strict.
enforcement & regulation
Although the act of money laundering itself is a victimless white-collar crime, it is often connected to serious and sometimes violent crime. Being able to stop money laundering is in effect, being able to stop the cash flows of international organized crime.
AML laws and regulations target activities that include market manipulation, trade of illegal goods, corruption of public funds and evasion of tax, as well as all activities that aim to conceal these deeds. Financial Institutions are expected to comply with AML laws, make sure that clients are aware of these laws and guide people with them without prior active government orders.
forfeiture
Law breakers are motivated by greed and the acquisition of material goods. Therefore, the ability of the Prosecution to forfeit property connected with criminal activity can be an effective law enforcement tool by reducing the incentive for illegal conduct. Asset forfeiture “takes the profit out of crime” by helping to eliminate the ability of the offender to command resources necessary to continue illegal activities.
The use of asset forfeiture in criminal investigations aims to undermine the economic infrastructure of the criminal enterprise. Criminal enterprises in many ways mirror legitimate businesses. They require employees, equipment, and cash flow to operate. Criminal enterprises also generate a profit from the sale of their “product” or “services.”
types of forfeiture actions
There are two types of forfeiture actions: criminal and civil. The criminal forfeiture action is referred to as an in personam action, meaning that the action is against the person, and, that upon conviction, the punitive effect of forfeiture can be used against the convicted offender. The civil forfeiture action is referred to as an in rem action, meaning that the action is against the property. The two actions differ in many ways, including: (1) the point in the proceeding, generally at which the property may be seized; (2) the burden of proof necessary to forfeit the property; and (3) in some cases, the type of property interests that can be forfeited.
A criminal forfeiture action must be judicial. The property subject to forfeiture is named in the same indictment that charges the defendant with a criminal violation. The jurisdiction of the court over the defendant provides the court with jurisdiction over the defendant’s property interests. The property may be forfeited in this manner only if the defendant is convicted of the underlying offense charged, and the trier of fact finds that the property named in the indictment was illegally tainted.
disclosure by lawyers and accountants
On September 2nd 2005, the 13th Amendment to the Anti Money Laundering Act 2000, was enacted, thus imposing on lawyers and accountants, specific regulation of mandatory disclosure. The purpose of the amendment is to prevent law brakers from using the protection of lawtes and accountant in their business transactions. The Amendmant states five categories as having a relatively high risk for money laundering: Real estate operations, buying and selling business, asset management and finance, receiving, holding and moving money into construction and corporate management, construction or management of a corporation, business or loyalty after.
According to the new Amendment, the lawyers and accountants are obliged to identify the clientws source of funds and to assess whether the requested action is at high risk for money laundering. The imposition of this Amendment on lawyers is a complex and sensitive matter.
cases represented by our firm
Case 618 – “Netivei Israel” – National Transport Infrastracture Company Ltd. Attorney Shai Wolstein defended a senior executive in bribary, coruption and money laundering charges, related to multi million project contracts.
The Angos Case – smuggling hundred of tons of meat from South America without certificates, distributed to tens of restaurants across the country. Attorney Shai Wolstein defended a senior accountant charged with fraud and money laundering of 25 million shekels.