Money laundering is the practice of disguising
illegally obtained funds so that they seem legal. It is a crime in many
jurisdictions with varying definitions. It is a key operation of the
underground economy11. The money laundering prohibition Act in
section 2 provides that: No person or body corporate shall except in a
transaction through a financial institution make or accept cash payment of a
sum exceeding:-
(a)
N500,000 or its
equivalent in the case of an individual
(b)
N2,000,000 or its
equivalent in the case of a body corporate.
Money laundering is a process whereby the origin of
funds generated by illegal means is concealed: drug trafficking, gun smuggling
and corruption.12
The objective of the operation which usually takes
place in several stages consists in making the capital and assets that are
illegally gained seemed as though they are derived from a legitimate source and
inserting them into economic circulation.[1]
Money laundering is not a new phenomenon: it is as old as crime itself.
Criminals have always endeavored to conceal the origin of illegally generated
funds in order to erase all trace of their wrong doings.14
Money laundering is also the legitimization or washing
of illegally obtained money to hide its true nature or source. Money laundering
is effected by passing it surreptitiously though legitimate business channels
by means of bank deposits, investments or transfers from one place to place or
person to another.15
In United Kingdom,16 the common law
definition is wider. The Act is defined as taking any action with property of
any form which is either wholly or in part the proceeds of a crime that will
disguise the fact that the property is the proceeds of a crime or obscure the
beneficial ownership of the said property.17 It is also the
processing of criminal proceeds to disguise their illegal origin or the
ownership, control of the assets or promoting an illegal activity with illicit
or legal source funds.18
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In the past, the term “money laundering”
was applied only to financial transactions related to organized crime but
today, its definition is often expanded by the Federal Government and the
Ministry of Finance to mean any financial transaction which generates an asset
as a result of illegal act, which may involve actions such as tax evasion or
false accounting. As a result, International Regulators such as the U.K office
of the controller of the currency see money laundering committed by private
individuals, drug dealers, businesses, corrupt officials members of criminal
organizations such as the mafia, and even states as serious offences.19 [2]
Money laundering is ipso facto illegal; the acts
generating the money almost always are themselves criminal in some way for if
not, the money would not need to be
laundered e.g the cases of certain past governors like Dr. Chimaroke Nnamani
and James Ibori attest to this fact.
The history of money laundering may not be purely
avid, but then history has it that many methods ere devised to disguise the
origins of money generated by the sale of illegal alcohol.20
Besides, in the U.K., banks face difficulties in their efforts to comply with
the proceeds of crime. Cases like Bowman v.Felse21 and also the case
of Ali and others22 are vivid examples. This is so because issues
dealing with money laundering are not treated with kid gloves.
[1] http://www.swiss-bankaccoutns.com
visited on 20/7/2011
14 the case of certain Governors in the Obasnajo
regime attest to this e.g. Diepreye Alamieyeseigha and James Ibori.
15
http://www.bizdictionary.com visited on 30/7/2011 by 5pm
16 http://www.amazon.co.uk visited on 30/7/2011 by 5:30pm