Money laundering involves taking funds obtained through unlawful means and passing those funds through a series of companies and bank accounts to disguise their illegitimate origin. A report on recent trends in money laundering by the Financial Action Task Force (FATF) says that money launderers are using the internet to clean up dirty cash.
FATF was set up by the G7 group of major industrialised nations. Its report says that on-line banking and gambling are the areas of greatest activity. The speed of on-line transactions, world-wide access to the internet and the reduction in direct contact with the customer are cited as principal factors which make the internet attractive to criminals.
In a separate report yesterday, a Subcommittee of the US Senate cited 4 of the 6 largest banks in the US as having inadequate money laundering policies and procedures. Bank of America, JP Morgan Chase, Citibank and First Union were the named institutions. The Subcommittee says that the banks are failing to monitor access of foreign banks to the US domestic banking network.