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The FATF has developed recommendations to combat money laundering, and the agency has three functions in regards to this criminal activity: The Bank Secrecy Act (the “BSA”) was enacted by Congress in 1970, as an effort to combat the use of financial institutions in money laundering crimes.
It has been estimated that at least $300 billion is laundered each year in the United States alone.
According to a 2009 study published by the United States Sentencing Commission, more than 81,000 people are convicted of money laundering on some level each year in the United States.
Software is also used to detect transactions with banking institutions in blacklisted or hostile countries.
When such transactions are identified, the program alerts bank managers who then study the information and decide whether it should be reported to the government.
In this age of electronic transactions to and from financial institutions around the globe, anti money laundering laws attempt to quell money laundering by requiring these institutions to identify and report suspicious activities.
Technology has also paved the way for anti-money laundering software, detects large increases in account balances or large withdrawals, and which filters data and classifies it according to levels of suspicion.
She wants the money to go undetected, so instead of making one large deposit into her savings or banking account, she breaks the money up and deposits one small amount each week.
This ensures the bank does not look at her transaction suspiciously since it is uncommon for her to deposit large sums of money.
To circumvent this step then, launderers funnel cash through a legitimate high-cash business, such as a check cashing service, bar, nightclub, or convenience store.
Large scale criminal groups may use complex money laundering techniques in order to avoid detection.