Money Laundering and Money Essay

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money laundering from the perpetrator's perspective. In specific, it will address the questions of whether virtual money can be counterfeited, whether the money can be trailed, and who can access the devices used for financing the system.

The simplest form of money laundering entails making it appear as though the money derived from one source (say, Source A) actually comes from another (Source B, for instance). That is, criminals perpetrating this crime attempt to cover the origin of their illegally-procured money, making it appear as though their source was lawful. If they do not do so, they will not be able to utilize that money, as a link could be established between it and some criminal activity, causing law enforcement personnel to seize the money (Money Launderering Basics - How Money Laundering Works - Howstuffworks). The practice of money laundering constitutes a key step in successful white-collar crimes, terror activities, and drug trafficking. This paper will look into money laundering as an activity from a criminal's perspective.

A money launderer opens several, unconnected virtual accounts under fictitious names. These accounts are financed with money from an organized criminal operation involving sports betting. The launderer is able to make purchases online from, as well as to, himself by making use of these accounts as though he were buying assets from fellow residents He can then guide all proceeds to another account, from which funds may be withdrawn via an ATM card or directly into a bank account. Tracing this money's source would be virtually impossible. The above scenario gives rise to the questions listed below:

1. Is it possible to counterfeit virtual money?

1. Is any trail left behind, using which the money can be tracked?

1. Who can access the computers that finance the system? (i.e., potential participants of a money laundering plan)

Counterfeiting Virtual Money

The ever-growing virtual worlds which have become part and parcel of a large share of the world's population bring to the forefront the issue of virtual ID security. Betting of real cash and the trade of game currency on markets within games has given birth to an unplanned, but swiftly developing, online stock market. Gamblers disgruntled with the emaciated real-world stock market will undoubtedly turn their attention to these viable virtual worlds.

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In the absence of any Securities and Exchange Commission in the virtual world for looking into virtual stocks' legitimacy, well-meaning virtual players will become easy prey for money laundering groups (Burns, 2009). Further, owing to the lack of any prime regulation with regard to virtual funds (such as that seen in case of paper money), virtual money is potentially left free for counterfeiting. With growth in virtual worlds' size and number of everyday financial transactions, a proportionate growth in cybercriminals is also seen. The absence of standardization between the worlds leaves no way to know whether a source has been cashing out and making Warcraft Gold, Linden Dollars, or some other game currency. Hence, it becomes very hard to track money laundering accusations. Thus, a criminal can freely commit frauds and need not worry about the crime tracing back to him.

Trailing the Money

Besides bank deposits, a money launderer prefers purchasing an asset/commodity and selling it, thereby escaping paper trail. If dirty cash is utilized in purchasing and subsequently selling a house, the resultant money appears to come from a lawful source - selling an asset. Technically, though the process doesn't evade paper trail, it will certainly reduce chances of tracing back to the original source. Money launderers largely purchase land and properties in foreign countries. The 2013 Profile of International Home Buying Activity of the National Association of Realtors claims that American property purchasers hail from as many as 68 nations, constituting seven percent of overall American home sales. More than half the study's reported transactions came from Canada, UK, India, China, and Mexico (Lu, 2014). The developing nation -- China -- displays its amazing purchasing power in all areas including real estate. In 2013, Chinese real estate buyers made up 12.3 billion dollars in sales, becoming the world's largest purchasers of real estate after Canadians. Moreover, roughly 53% of reported Chinese purchases took place just in the California region (Lu, 2014). Although the exorbitant median purchase price (425,000 dollars) does raise a few red flags, nearly 70% of purchases were 100% hard cash deals. This figure topped every other nation. Furthermore, one cannot determine how many of these purchases took place using illegally-procured money; worth mentioning at this juncture is the fact that China's.....

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