Dirty dealing: the untold truth about global money laundering, international crime and terrorism

241 Pages·2006·1.01 MB·English

by  Peter Lilley

Dirty Dealing US PB aw 26/7/06 2:43 pm Page 1
“A ground-breaking book… one of the year’s best business books.” THIRD “Peter Lilley is the leading British money laundering expert”
EDITION
Director DAILY MAIL
“Alarming for every civilized reader.”
D
Professional Security
I
R
“Entertaining, well written and well presented.”
John MulQueen, The Irish Times
T
Y
Over US$2 trillion in “dirty” money is washed around the world every year, much of it

byorganizedcrimesyndicatesgrossingmorethanmanydeveloped economies. Amazingly, D
most of the facilities you need to launder money can be bought via the internet.
E
Now in its third edition, Dirty Dealing continues to expose the awesome scale and scope
of global money laundering and its infiltration into the world’s legitimate business A
PETER LILLEY
structures. Peter Lilley lifts the lid on this murky and frightening underworld. He reveals DIR T Y
how highly organized and sophisticated criminal organizations and terrorist groups are L
seriously undermining the economies of many countries, their financial systems,
I
governments and businesses. Full of incredible facts and figures, it includes updated
information on: N
• the funding of international terrorism; G
• major national and international criminal groups;
• the impact of the internet and “cyber laundering”;
• anti–money laundering strategies for all types of business.
A shocking and eye-opening account, Dirty Dealing is the first book to show how the DEALING
proceeds of global organized crime are laundered through the world’s financial and
business systems to emerge without a hint of a stain. P
E
Peter Lilley has been involved in the prevention, detection and investigation of global T
E
business crime and money laundering for over 20 years. He now advises on how to fight
R
these growing problems through his firm Proximal Consulting. Much sought after as a

speaker, he makes frequent expert contributions to print and broadcast news media such L
as the BBC and CNN. He is the author of Hacked, Attacked and Abused, also published by I
L
Kogan Page. L FULLY REVISED AND UPDATED THIRD EDITION
E
Peter can be contacted via www.proximalconsulting.com Y
THE UNTOLD TRUTH ABOUT
www.dirtydealing.net
GLOBAL MONEY LAUNDERING,
£12.99
US $22.50
INTERNATIONAL CRIME
Kogan Page Kogan Page US
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
AND TERRORISM
United Kingdom USA
www.kogan-page.co.uk Crime / Business
i
DIRT Y
DEALING
ii
This page intentionally left blank
DIRT Y
iii
DEALING
FULLY REVISED AND UPDATED THIRD EDITION
THE UNTOLD TRUTH ABOUT
GLOBAL MONEY LAUNDERING,
INTERNATIONAL CRIME
AND TERRORISM
PETER LILLEY
London and Philadelphia
iv
Also by Peter Lilley
Hacked, Attacked and Abused
First published by Kogan Page Limited in 2000
Reprinted 2001
Second edition 2003
Third edition 2006
Apart from any fair dealing for the purposes of research or private study, or criticism
or review, as permitted under the Copyright, Designs and Patents Act 1988, this publi-
cation may only be reproduced, stored or transmitted, in any form or by any means,
with the prior permission in writing of the publishers, or in the case of reprographic
reproduction in accordance with the terms and licences issued by the CLA. Enquiries
concerning reproduction outside these terms should be sent to the publishers at the
undermentioned addresses:
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19141
UK USA
www.kogan-page.co.uk
© Peter Lilley, 2000, 2003, 2006
The right of Peter Lilley to be identified as the author of this work has been asserted by
him in accordance with the Copyright, Designs and Patents Act 1988.
ISBN 0 7494 4512 2
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Lilley, Peter, 1943–
Dirty dealing : the untold truth about global money laundering,
international crime and terrorism / Peter Lilley.—3rd ed.
p. cm.
ISBN 0-7494-4512-2
1. Money laundering. 2. Organized crime 3. Terrorism–Finance. I.
Title.
HV6768.L55 2006
364.16’8—dc22
2005035377
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in the United States by Thomson-Shore, Inc
v
Contents
A note to the third edition vii
Preface: my beautiful launderette ix
1. In the beginning… 1
2. The nth largest global business activity 28
3. The nearest thing to alchemy 47
4. Lost in the wash: the business of money laundering 64
5. Complete anonymity 88
6. Washed in space: cyber laundering in the 21st century 108
7. Terror Finance Inc. 127
8. Whiter than white: the official response 159
9. Coming clean: preventative strategies for business 182
10. The final spin 193
Appendix I: web directory 201
Appendix II: glossary of terms 205
References and further reading 212
Index 215
vi
There is no fortress so strong that money cannot take it.
(CICERO, 106–43 BC)
Gold is tested by fire, man by gold.
(ANCIENT CHINESE PROVERB)
vii
A note to the third edition
When I was asked to revise Dirty Dealingfor a third edition I approached
the original text – first written in 1999/2000 and then revised in 2003 –
with some trepidation. Not because of a fear of what I had originally
written but because I was not at all sure what would need to be revised
and how any revisions could be achieved. In the end, I have let much of
the original text stand, with relevant amendments and updates. I have
also added a significant amount of new material, most principally
Chapter 7 on terrorist financing. I do not make the grandiose claim that
this book provides a history of money laundering; but I think it does give
a valid snapshot of what has happened since the late 1990s.
In the original 2000 edition of Dirty Dealing, terrorist financing merited
a few mentions in passing. By the 2003 edition – written in the immediate
aftermath of 9/11 – a new chapter on the subject was added to the book.
When I reviewed this 2003 chapter as part of the preparation for this
edition I quickly realized that my views had shifted, and that I needed to
produce a completely new chapter. If this new chapter is more sombre
than others in this book, this is because I think that the issue of terrorist
financing (and terrorism as a whole) is one of the most disturbing prob-
lems of the twenty-first century.
There is also one other major change: the first two editions of Dirty
Dealingcontained a country index listing individual jurisdictions together
with their inherent money laundering and organized crime risks, as well
as details of the Financial Action Task Force (FATF) country ‘blacklist’.
Because this information is constantly developing and changing I have
taken the view that it would be a far more useful and timely resource if it
were online. I have therefore not included it in this edition – but an online
version can now be found at www.dirtydealing.net. This website also
viii A note to the third edition
contains various other support materials for this book including short
films on terrorist financing and money laundering. It will also have
updates and newsletters on the subjects covered by Dirty Dealing.
Two other comments: if you agree, disagree or want to add your views
to what I have written please feel free to write to me at pl@proximalcon-
sulting.com. Finally, this book would have been much more difficult to
write without the support of my family and the Proximal team: Valerie
Dalgleish, Jacqueline Ahmed, Ramona Richards, Jane Shave and James
Lilley. To all of them: thank you.
Peter Lilley
ix
Preface:
my beautiful launderette
Behind every great fortune is a crime.
(HONORÉ DE BALZAC)
With few exceptions criminals are motivated by one thing – profit.
Greed drives the criminal, and the end result is that illegally gained
money must be introduced into a nation’s legitimate financial
systems… Money laundering involves disguising assets so they
can be used without the detection of the illegal activity that
produced them. This process has devastating social and economic
consequences. Money laundering provides the fuel for drug dealers,
terrorists, arms dealers to operate and expand their operations…
Left unchecked, money laundering can erode the integrity of our
nation’s and the world’s financial institutions.
(THE UNITED STATES DEPARTMENT OF THE TREASURY
FINANCIAL CRIMES ENFORCEMENT NETWORK,
FINCEN ADVISORY, MARCH 1996, 1, ISSUE 1)