Crime and Money Laundering
By Maxwell Pereira

A report by global business consulting firm PricewaterhouseCoopers on anti-money laundering in 2003, put India, Pakistan, Singapore, Brazil and Zimbabwe under the 'high risk' category for susceptibility to money laundering and terrorist financing. Just a while earlier, the Indian Parliament during its 2002 winter session, had passed "The Prevention of Money Laundering Bill" making it mandatory through regulatory compulsions for financial organisations to check, identify and report suspicious transactions.

In 2004, India continues to be among countries being actively monitored by Interpol and international banking watchdogs for massive money-laundering due to inadequate internal compliance procedures. Scrutiny of international transactions of information on "sender, recipient and reasons for money transfer" has often proved false in many cases.

Evidently, graduating from trust based 'hawala' operations, the Indian money operators are seen by the world community as not lagging behind in demonstrating creativity in combining traditional money laundering techniques into complex money laundering schemes prevalent and practised worldwide, designed to thwart the ability of authorities to prevent, detect and prosecute money laundering.

World opinion indicates that India should act to adopt and implement a comprehensive anti-money laundering regime, including the creation of a financial intelligence unit to share information with counterparts around the world.

Against this background, Jyoti Trehan's latest magnum opus "Crime and Money Laundering" is not a day late. His focus is on criminals' concern bordering on 'passion' today to legitimize the proceeds of crime - a process, "also called money laundering", he states. True.

But as a policeman he is also constrained to add to the criminals' concern his own, and that of a nation plagued with security and economic problems - to describe and analyse it in depth. And so the span, spectrum and dimension of economic activity - its aspects, ramifications and impacts that afford the criminal not only a platform but a vast arena to play in and operate from - the vast canvas on which Trehan spreads his paints to provide the reader and the law-enforcer worldwide a myriad picture, with insights into the complex labyrinthine maze of what today the term 'money laundering' encompasses.

The American Bureau for International Narcotics and Law Enforcement Affairs in its Report released in March 2002 states money laundering as organized crime's way of trying to disprove the adage that "crime doesn't pay." That it is an attempt to assure drug dealers, illegal arms dealers, corrupt public officials and other criminals that they can hide their profits, and to provide them the fuel to operate and expand their criminal enterprises.

Over US$500 billion are the sums of money involved in crime and drug-trafficking worldwide, Trehan educates the reader; going on to quote from World Bank estimates that money laundering today is an US$800 billion to One Trillion problem!

In a post 9/11 world galvanized into international cooperation leading to significant modifications to anti-money laundering laws, Trehan's book illustrates the intimate connection between terrorist activities and Crime. Describing how 'Big Crimes' generate 'Big Money' Trehan leads the reader through various facets of organized crime; terrorism; trafficking in small-arms, drugs, women and children or illegal immigrants; bribery and corruption; smuggling of bullion, diamonds, or antiques; economic scams and international economic crimes; tax evasion and black money; credit card frauds; counterfeiting of goods, currency, et al - and the kind of money generated, leading to its uses for nefarious activities.

He examines the increasingly sophisticated methods used to convert or 'launder' proceeds of crime into legal tender in a world of International Banking Companies, Overseas Financial Centres considered tax havens and Asset Protection Trusts with "flee clauses" that provide for immediate fund transfer to another OFC if the APT is threatened by inquiry - to make it nearly impossible for competent authorities to generate paper trails or to identify beneficial owners of companies, while simultaneously protecting those engaging in serious financial crime from civil or criminal prosecution. On how the problem is global, trans-national, in a financial world where international boundaries have blurred into oblivion.

A word in conclusion: When products of research studies result in print for public consumption, there is need to an extent to guard against the heavy 'sting' of academic fervour at home only to the 'intellectual'. So is the need for the text of a bureaucratic public official to be less jarring than the recordings of 'babu'istic language in government files and folders. While Jyoti Trehan has endeavoured to overcome and negate both these possible drawbacks, the editorial inputs expected of a publisher that displays the Oxford brand are missing. Especially when readers are constrained to return and re-read passages and to know the author's mind in declarations like "operationg 'out' of conventional jurisdictions". While this would have made the book on a subject much in the public realm more layman worthy, the monumental "Crime and Money Laundering" is bound to interest financial pundits, lawyers, law enforcers and students of law, and other researchers in sociology and criminology.

800 words: 01.12.2004: Copy Right © Maxwell Pereira: 3725 Sec-23, Gurgaon-122002. You can interact with the author at http:// and


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