> From: reject [[EMAIL PROTECTED]]
> To: [EMAIL PROTECTED]
> Subject: Purpose of anti-laundering laws?
>
>
> Obviously, assorted FedGoons(tm) dislike untraceable money. Nasty
> terrorists, child pornographers, drug dealers, and other horsemen could
> hide their "profits" then...
>
> But is there a *legitimate* reason to have anti-money-laundering laws? I
> can't think of any, but perhaps I'm being naive.
Anti-Laundering laws are (on their face) an attempt to prosecute the "War on
Drugs." Having taken on a cause so hopeless and impossible as stamping out
illegal drug flow into the United States (which I take no position on one
way or the other) and having met with little or no success, the United
States began to enact laws to attack the money instead. Still, in my view,
attributing any early (1986) direct attempt to clamp down on Joe Sixpack and
track citizens at large by fearmongering to get money laundering laws passed
belongs on the X-Files. What happened from 1994 on is a different matter.
This is all apparent from the wealth of legislative history of such wonders
as the Money Laundering Control act act of 1986 and The Money Laundering
Suppression Act of 1994.
Imposing reporting requirements and such as well as forming the concept of
"money laundering" as a crime in general is really quite a clever move as it
immediately expands the number of investigators at the disposal of the
government by the number of bank and financial services employees in the
United States. Every bank, credit card company and brokerage is now a
policeman. A policeman empowered to ask you for identification, investigate
you and your credit before giving you the privilege of given them your money
to watch over. A policeman empowered to make their own judgements (without
the benefit of any investigative training or experience) on which
transactions are "suspicious" and which aren't, and then report your
financial dealings (with or without cause) to the government on a whim.
This was and is rather expensive. Each CTR (currency transaction report)
costs a bank between $5 and $25 to process. From 1987-1996 U.S. banks filed
more than 77,000,000 million Currency Transaction Reports at a cost to
consumers of over 1.2 billion dollars. Between 1987 and 1996 because of
CTRs alone 7,300 defendants were charged in 3,000 money laundering cases.
580 were convicted. This represents a CTR only cost of 2.06 million dollars
per conviction. In these cases 18 million dollars was seized. 8 million
was eventually forfeited. That's $150 dollars spent in CTRs to appropriate
a single dollar of "evil" money. Those are just the stats for CTR related
laundering cases.
In fact, CTRs rarely _cause_ a money laundering investigation. Money
laundering investigations (like tax evasion investigations) almost always
stem from other crimes and money laundering is increasingly simply tacked on
to get people to plead out. The most recent case that offends my
sensibilities was in Chicago where a small time food stamp criminal (total
amount involved in the fraud was around $900) was charged with money
laundering because he deposited the proceeds in his checking account. (This
was supposed to be the "conceal" part). He faced 20 years on federal money
laundering charges and therefore plead easily to 7 years for fraud.
What has happened is that money laundering laws have not really impacted the
war on drugs. Big time drug dealers and cartels now use professional money
launderers. These professionals accept bulk cash and cut a cashier's check
on the spot for the full amount to Dr. Evil. They then take the risk
themselves of laundering the cash. They do so through sophisticated and
full time operations. Prosecuting them, or seizing their assets, has proved
rather difficult. The odds of being convicted in a money laundering only
trial with are a comforting 1 in 8. In cases involving over $1 million that
drops to 1 in 35. This also glazes over the fact that 80% of seizure cases
never result in criminal _charges_ much less prosecutions.
What money laundering laws _have_ done is make it much easier to coerce and
convict a host of smaller and more harmless crimes. They have also given
investigators (private and public) much greater access to the financial
habits and dealings of the citizenry at large. (CTR information can be
purchased from a variety of databases now). I don't think this was the
intent in 1986, it almost certainly was in 1994.
