Money Laundering: Trends and Consequences

Abstract

The article critically validates the conceptual and operational relationship among bribery, corruption, and money laundering. An understanding of such relationships should benefit the strategies directed at improving awareness and the actions that would steer activism against bribery, corruption, and money laundering. Success of anti-money laundering would bring greater sanity in the financial and monetary systems thus facilitating better growth of humans. The chapter is fundamentally qualitative, discussing related issues and proposing insights. Information and data were gathered from dedicated sources; personal and media. Almost any criminal activity that generates money, assets and action that sooner or later can be liquidated can be a source of dirty money. Banking systems, cash-intensive businesses, the gaming sector, trade or investments, unregulated financial services, and professional advisers are the main participants and conduits in money laundering. Money laundering affects the legality of financial transactions, leads to unreliable changes in the demand for money, poses major risks to a bank’s soundness, and distorts monetary exchange rates due to unanticipated cross-border asset transfers. Globally the risk of money laundering is increasing, and the consequences are proving unbearable. The United Nations Office on Drugs and Crime, in 2022 estimated that over USD2trillion is laundered every year, yet we remain without sufficient resources and instruments to fully know, understand, act, and accomplish seamless anti-money laundering strategies on the atomic and molecular level. The article contributes a newer perspective on money laundering as a five-stage project, the mutual propulsion among bribery, corruption and money laundering, and that anti-money laundering is as useful as would be creating full awareness of what it is, how to expose it, and how to think and act decisively together.

1. Introduction

The chapter discusses the concepts of bribery, corruption, and money laundering concluding that an effort to have cut-and-dried definitions does not look attainable nor any the more useful in curbing the three evils. However, that the three share a lot and that the distinctions among them may blur often. Being blood cousins, operationally they reinforce one another and, in that relationship, weakening one should weaken the others. The chapter proposes a ruthless war on the three fronts. Literature abundantly stage money laundering into 3 phases (placement, layering, integration) but this chapter will expand the stages into 5 phases (planning the money laundering, execution of the plan, cleaning the gotten money, rerouting the money to the launderer, and shoving the loot). The 5-phase argument highlights the presence and importance of the actual activities happening from start to closure of each money laundering effort. While clarifying the theoretical nuances of money laundering, it gives investigations clarity of what will be at hand with a case in their stake. The scripts on JSK are real-life and show how some people can make a living at the exploitation of other humans.

2. Money laundering, bribery, and corruption: the complex debate

A debate on either one or the relationship between any pair thereof, and worse among the trio is not without difficulty of fluency as of accuracy. The difficulty arises from the implicit and explicit impact assigned to bribery, corruption, and money laundering in different epochs in different communities [1, 2, 3, 4, 5].

Matorera presents over a hundred interpretations of corruption while Oladele [6] breakdown the concept into variants that include transactional corruption, supportive corruption, extortive corruption, traditional corruption, modern corruption, personal corruption, institutional corruption, local corruption, national corruption, international corruption, grand corruption, petty corruption, and representational corruption.

These variants are variably found entangled with acts of money laundering. The trend has witnessed the growth of transactional corruption involving individuals, syndicates and institutions doing one good favour of a dirty deal for each other across frontiers and involving huge amounts of money.

Bribery poses its own definitional complication for the same reasons as corruption: culture, economic modalities, and impact. Effectively bribery is the offering, giving, receiving, or soliciting of money and/or any item of value or act of personal benefit in return for a decision and/or performance, from a person with some authority or capability. While most definitions of bribery create the impression that bribes are only when they involve a civil servant this chapter argues that bribery has nothing about who are involved, but about the intent(ion), the actors (public or private, individual or institutional, national or international), the consideration (money, artefact, service, act) the effect (delay/accelerate/smoothen/harden a process), the target goal (win time/a good, etc).

We went to the CCMA, that was 04/03/2019 and the order to sequestrate on JSK was granted in June, but it took 6 months to be delivered. Just to give JSK time to wind up business at the place I worked. Come the delivery of the sequestration order on 09/12/2019 JSK was no longer at the address mentioned on the sequestration letter.

Here we see the bribe paid to the CCMA (Commission for Conciliation, Mediation and Arbitration) caused a process that should take at most 3 days to take 9 months. The behaviour of the CCMA official hardened things for JSK’s victim while smoothening for JSK. The consideration was for JSK, getting the delay which saved him his attachable property and for the CCMA official the consideration was money received plus a promise to afford the CCMA official’s daughter a place at JSK’s Private School. The general perspective is that corruption subsumes bribery. However, many acts that manifest bribery are active in the doing and understanding of corruption. Figure 1 show that often bribery and corruption co-happen as much as can bribery and money laundering and corruption and money laundering, and a fourth variant where the three will happen inseparably integrated.

Figure 1.

Bribery, corruption, and money laundering are intricately interlinked (source: author synthesis of literature).

A shorthand definition qualifies ‘money laundering’ as the process of making “dirty” money appear legitimate. The chapter will propose an expanded concept of money laundering as the process or practice of acquiring or generating money by illegal means, concealing this source and its movement and destination, while exploiting and creating every opportunity to clean or legitimise the ill-gotten (dirty) money. The laundering or cleaning of the ill-gotten money can take various forms. Cleaned or laundered, the fact remains that the money is gotten through irregular means and thus is ‘dirty money’. Because the manner the money is gotten is wrong at law, however the process of trying to clean it, it remains illegal. There are kinds of dirtiness as much as there are kinds of ways money launderers try to clean and legitimise it.

Money is neutral and innocent, it is those humans who put their hands or their claims on it that make it dirty. There are various ways the money can attain this dirtiness. The source of the money must be unethical, illegal, and immoral. Some examples of activities and behaviours that qualify the money as dirty include smuggling of weapons, any criminal activities, illicit trading in weapons, poaching endangered flora and fauna, human trafficking, drug trafficking, gratification of bribery and corruption, fraud, theft, pyramid schemes, Ponzi schemes, involvement in syndicated, and organised crime, racketeering, heists, modern slavery, claimed bankruptcy, etc. Buying valuables like diamonds, valuable stamps, and other priceless but small assets is another way to easily move money across borders while they are treated as not-for-sell items. These are then sold on the other side and huge profits made.

All the above activities in one or more ways, involve bribing and corrupting one or so individuals. This explains how money laundering almost always intricately conjoins with bribery and corruption. For the money laundering to be successful the bribery and corruption going with it must be well planned and executed with intelligence. The bribery and corruption almost happens at every stage in money laundering.

3. The gearbox of money laundering

Earlier we pointed the intricacy of the three evils: bribery, corruption, and many laundering. In operation one links and empowers the other two. This is the point that Figure 2 is putting to the readers. The relative sizes of the ‘gears’ are not static, they are proportionately variant, and purposively transient. What each represents and by what relative amount is historically and geographically conditioned. At some point in the history of a society one of the three may be the primary and driving gear and in a new epoch the gears may change their significance and roles. Care must be taken in design-thinking strategies of confronting money laundering. Often monolithic perspectives on what is money laundering and how to destroy it leads to unwinnable battles by the government and police agencies.

Figure 2.

Hypothetical relationship among bribery, corruption, money laundering as case in point: (synthesis by author).

It matters to understand money laundering fully, have confronting strategies in each of its stages making sure that the proposed strategy is grounded, and resourced. For instance, a government strategy that overfocuses on killing corruption fill makes money launderers shift their success factors into bribery.

4. Stages in money laundering

This chapter appreciates the 3-stage description of money laundering that abounds in literature (placement, layering, integration) but feels that the planning that the launderers do must be factored in as it is a critical success factor in the money laundering process. Still there is some danger if huge sums of the dirty money are retained in bank accounts or in short-hand assets. The concealment can be improved with yet another stage of distancing the dirty money from the launderer, and I call this stage ‘shoving away’. A five-stage process that conjoins the planning (pre-execution) and generation of the dirty money should be recognised and appreciated as important for a money laundering project. After all this is what is happening on the ground.

Planning and generation of the money which is then veiledly placed in the legitimate financial system and rerouted to the key or primary launderer who integrates it into their estate. To improve on making the money untraceable the integrated money is normally transformed into assets that are registered in children, trusts, foundations, or other entities that will further veneer the launderer from the dirty money.

Table 1 compares the traditional and the chapter’s proposed stages in money laundering.

Proposed 5-stage approach		Traditional 3-stage approach
Planning the money laundering project/strategy	Involving all strategic players in developing a risk-proof Strategic Plan of a SMART’ED Strategy Plan		Placement is skimpy and gives no indication to whether money launderers do plan their activities nor are disciplined in their execution of a money laundering adventure
Executing the money laundering plan/project	Executing the laundering Strategy Plan	Placement
Cleaning the ill-gotten money	Legitimising the money	Layering	Legitimising the money
Rerouting the money	Returning the dirty money to launderer after cleaning it	Integration	Returning the dirty money to launderer after cleaning it
Shoving away	Further distancing launderer from the dirty money

Table 1.

Comparison of the 5-stage and 3-stage money laundering process (source: author synthesis of literature).

4.1 Planning the generation/acquisition of dirty money

Generating or acquiring money needs some planning either the way it will be generated or acquired is legitimate or criminal. One of the trending approaches launderers use is treating each money laundering project as a case in point. This helps them to be specific, agile, and have a robust risk assessment framework. This greater understanding of the methodology that each money laundering project will deploy/employ makes for a safer execution that leaves every participant unnoticed and ‘unwanted’ by the law enforcement agencies. The plan involves:

• Role assignments,

• Study of stakeholders, the targets, the jurisdictions, the routes to be taken by the dirty money, the persons to bribe,

• The critical actions, behaviours, to avoid,

• When best to start, and milestones,

• Establishing the communication channel,

• Etc

4.2 Executing the plan and generating the dirty money

There are various ways through which dirty money is generated then pumped into the legitimate financial system. Because these means of generating the dirty money are illicit there is certainly a lot of careful planning about its concealment and movement right to the end of rerouting it that must happen. For now, we focus on the way the dirty money is generated. We mentioned them earlier and we will be dealing with each to some profundity below.

4.2.1 Smuggling of weapons and trade in weapons

This involves obtaining weapons from an individual, company or country and moving them illegally to another party resulting in the weapons being used for criminal or terrorist activities. With increasing sympathy with the oppressed groups across the world and the trend toward a multi-polar world the designation of a terrorist individual/group has increasingly become contested. Thus, what may look like illicit trading in weapons and smuggling of weapons may not be viewed and felt the same by another people.

4.2.2 Illicit trading in weapons

There appear to be a global increase in the number of companies, registered and not, that are quick at assembling weapons of various potentials on order and get them delivered to buyers and end-users. In periods of warring, recipients of massive military support may illicitly trade the military hardware for personal, syndicate or national benefits in other areas of need. Such areas of urgent need may be health and medical needs, food, etc. whose supplies are normally affected in times of war.

4.2.3 Poaching endangered flora

The poaching of endangered flora is seeing newer strategies that involve the participation of workers in sanctuaries. Seeds, buds, seedlings, and whole plants can be removed from the protected areas and sold on the illegal market. The increased prominence of herbal medicine has increased attention to the importance of natural flora-based medications as against artificially prepared medicines. Flora which are related with these forms of medicinal importance are coming under survival and sustainability strain.

4.2.4 Poaching endangered fauna

The poaching of endangered fauna continues in most countries and is increasing in times of war, and as corruption increases as well as loss of accountability. In most countries sanctuaries are taken care of by personnel who are poorly paid, often with no pension guarantees and subjected to poor conditions of work and service. Such workers feel pressured to make ends meet and to amass something for the life after work. One way is for them to be part of the poaching syndicates or do the poaching and externalisation of the parts or whole bodies.

4.2.5 Human trafficking

Humans are generally brought willingly but under false promises or unwillingly from one place to another by traffickers. Trafficking of human beings can be for their labour, body parts or for their use as sex objects has a long history. With the newer ICT, finding persons who can be easily lured into travelling with or without aid to other places has become easy, less expensive, and harder for policing agents to detect. However, research into human trafficking has distilled indicators of human trafficking for body parts, sexual exploitation, forced labour, and modern slavery.

Where human beings are trafficked for body parts one of the key indicators is that agents in the chain of the traffickers have special concern about the medical and health conditions of the prospective victim. Concerns are mostly focused on blood group types, medical history, and general fitness. The prospective victim will be given high promises so that when they are required to undergo a medical examination, they will find this worth their while. To further entice the prospective victim the medical examination questionnaire send to them is about non-frightening issues like height, eyesight and whether one puts on spectacles.

However, the medical practitioner to whom they are send will test for things that are directly related to the person that will be sought after: blood and serum tests; HIV-AIDS; yellow fever history; etc. In cases where the medical practitioner is unaware and not affiliated with the trafficker, they are requested to send a copy of the populated ‘real’ detailed questionnaire to the trafficker. Where the medical practitioner is a participant in the syndicate, they ‘know the rubric’ and will ‘follow the game’.

Based on the medical examination results a prospective victim who failed the test and is not meeting the bill for the target traffickee will never be communicated with. The target traffickee who passes the medical examination may be deemed successful and proceed to getting travel arrangements fulfilled. In the most ruthless cases the prospective victim will be required to sponsor their travel to the destination which is normally not the place where they will be demised.

In other cases, the agent is given the money to arrange for the travelling of the prospective victim. The agent may pocket part or all the money relative to how much they feel the prospective victim can afford. If the target traffickee can afford part of the total cost the agent would always come in to ‘rescue’ and finish up payments. Launderers and traffickers strive to build huge trust with their victims and can use technology in so doing: fake websites, people making recommendations, attachees who will be assigned to a victim and keeps spirits high through video and text communications, use of videos of nice places, and faked up GPSs.

4.2.6 Drug trafficking

Drug trafficking encompasses the shipment of illicit drugs or legitimate drugs illegally. With most countries struggling with the payment of doctors and other medical staff they have laws that allow doctors and medical staff to run their own private practices. The problem that has continued to plague these governments is the large stock thefts and trafficking of medicines and accessories from Government facilities to the privately owned facilities. The trafficking involves pilfering of small individual items to the interception of consignments meant for government facilities or taking of consignments already in government facilities.

4.2.7 Fraud

Fraud is a premeditated and intentional deception perpetrated by one party on another with the goal of making an unlawful gain, in the process depriving the victim of a legal right. The deception can be explicit or tact and may take advantage of the position or the trust gotten from the victim. There is an increase in the number of fraudulent cases most of which are made easier to carry out by the advances in science and technology. Artificial Intelligence is widely being used to create false scenes which can become instrumental in the commission of fraud. Pictures, voice-copying, animations, and doctoring are all being used in committing fraud.

4.2.8 Ponzi schemes

Ponzi scheme is fraud in which an unsuspecting party (individuals, corporate, institutions) are lured into making monetary contributions (investments) in a non-existent enterprise on the promise of quick returns. To create and sustain the momentum of investing, early investors are paid out from their own monies plus that of those following them in the queue of (victim) investors. This fraud banks on the variance between the stream of investments and of payouts. The idea is to keep inflows as many times higher than payouts. The scheme would normally collapse when the inflow-outflow balance is deemed undesirable or when the launderers feel it is time to disappear before consequential measures begin to happen.

4.2.9 Heists

These are complex in their structures, modus operants and intellect. Structurally heist groups/teams/syndicates resemble the common corporate structures of hierarchical, flat, matrix, boundariless and agile organisations. Various teams/entities can operate in a teamwork on a continual basis or loosely on an opportunistic basis. For instance, a team can be at the core of the robbery, and another may be providing the surveillance and backup support. It is not uncommon in this ‘market’ that 2 or 3 teams come together for ‘a kill’. Depending on the complexity of the ‘heist job’ the 2 or 3 may break to form skunkworks. Each skunkworks will take up a task/role and ensure it gets executed perfectly efficiently. Mostly, many of the tasks in the preparation, execution and ‘burial’ of a heist should be non-violent. They need lots of interfacing and in the process need the inflow of data and information into the skunkworks. This leaves so much of the need to corrupt and bribe people in those interfaces. Bribes can range from ‘one more can of beer’, trolley/grocery money, to cars, houses, huge amounts of money.

There are other enticements in kind, like scholarships, holidays out, legal representation or medical sponsorship. Heisters are witchy at studying their targets either for information or for the actual robbery. There is a gradational growth that is often resulting in hardnosed heisters who grow from facultative, amateur, habitual-traditional, to hardcore heister.

4.2.10 Racketeering

Racketeering is one of the organised or syndicated crimes in which racketeers set up a fraudulent, coercive, extortionary racket (the scheme, operation) that serves in their collection of a valuable (money, property, jewellery, etc) from their victims or proxies of their victims. Ransoms for personal release or for the release of another party fit in this money laundering practice. Our conception of racketeering does not imply that the victim will be held in the hands of the racketeer(s). Listen to this script:

I won’t be going back to the North-North Province, I am leaving to stay in Russia. I was kidnapped when I was in Grade 8, stayed with my kidnappers for 4 days and was let back, I understand my family had been forced to secretly pay R1million, shut-up to the police and thereafter make secret monthly payments to a certain old lady, 63 years old now. Everything is in exchange for our lives as a family.

The script sums a situation in which the brutal crime of coercion, extortion and threat against life is used to create a regular stream of income to a syndicate. Racketeering is one of the commoner crimes that are little noticed. In violent schools in violent communities of violent countries unfortunate kids are required to pay protection fee/levy by individuals or gangs. These payments may be in forms of daily monies, food-pack, or of a weekly, monthly, or termly lump sum payment. Sooner or later the young victim will break out, unable to bear the humiliation on their persona and humanness. The demand may lead to suicide, forced thefts and devastating depression on the part of the learner.

I joined a gang when I was in grade 7, that was the best defence I could create for myself at school, at home and anywhere between these places. I had lived 2 years stealing R2 daily to pay for my freedom, this got me a bad label at home, when I did not have the R2 it had to be something. Even when I didn’t go to school because I didn’t have the protection, I would have to bring up including for the days of absence.

The script shows how much money laundering is not just with the old or huge monies. This also show how much the evil practice is devastating kids. The launderers in the script have gone through all five stages. Threatening their victims with death is enough deterrence against reporting to parents or teachers. Because the collected R2 is small and used in buying consumables and perishables like cigarettes, beers, drinks, drugs the launderers do not need further concealment except a small lie to an intriguing parent.

4.2.11 Abuse of (official) power

In both private and public sectors there is always someone with a desire to abuse their official powers for self-aggrandisement. For instance, the convicted Teodoro Obiang, former Equatorial Guinea vice president, had amassed properties in France and lived a high life far larger than a measure of his official and legitimate income. Among the assets seized from him were an over Euro100-million, 101-room mansion situated in the porsche and leafy Foch Avenue, Paris, France. There were numerous supercars with a value above Euro5.7 million, luxuries, jewellery, artefacts, and many other items.

Listen to the following script of an applicant who waited ‘forever’ for approval of a relocation of a school.

I deposited an application for relocation of my school, September 2021. I moved my students to the new place in October and finished the year at the new location. Come 2022 January an official hadn’t done my relocation papers. Throughout 2022 I was from pillar to post with nonsensical requirements, it was the same throughout 2023. Come 2024 getting wind that I was going to sue, the Director who was sitting on the application approached me with a suggestion on how to detail the lawsuit and that he would ensure my win. We would share 20% him and 80% myself of the money his ministry would be made to pay.

Deliberately committing offences that result in the government being sued and the culprit share the spoils of the lost lawsuit with the suer has increased in the recent past. This is so mainly because there are no systems to hold office-bearers accountable for their misdemeanours. This is just one of the many creative ways of theft, fraud, corruption, and illegal ways of making dirty money from governments.

4.2.12 Over and under-invoicing

Over-and under-invoicing are usable in money laundering practices. By under-invoicing, the provider/seller sells their goods or services at a price far lower than the market and the provider normal price. This means the buyer gains. However, the buyer will reroute/payback part of the gain to whoever took the trouble and risk of under-invoicing. In over-invoicing the buyer will receive an invoice with an inflated amount, pays the invoice. In this case the seller gains and will reroute part of the extra money to the whoever took the trouble and risk of the over-invoicing at the seller enterprise.

We emailed the invoice in the morning, 08 h54 12/09/2021. After lunch a courier delivered under “private & confidential” Ms. HDB. There was the earlier invoice written over higher figures and some quantities inflated. We made a new invoice with the indicated write-overs and return it to them same evening. This was instructed through a telephonic conversation. The new figure was now 20% higher than our original. The next noon, 12h56 13/09/2021 a deposit of their higher figure was made. We delivered the order as on our original invoice plus a locked metallic box.

The script shows how a buyer can connive for an over-invoicing and this normally goes with the threat of ‘switching to another supplier if the seller can’t take the deal’.

4.2.13 Claimed bankruptcy

Shameless abusive individuals and businesses would use the claim on bankruptcy as a strategy to evade paying obligations like taxes, outstanding salaries, orders, credits, etc. Whatever strategy money launderers use they bank on one or several favouring conditions: nature of the victim, weaknesses at one or the whole judiciary system (police, courts, gaol), their felt powers and strengths, etc.

We had long delays with the CCMA, it should have been done with two seatings all coming on the same day or at longest in the same week or five days. But it took 10 months giving JSK time to hide and remove and sell some of his assets. When the order was released at the CCMA there was nothing worthy of attaching. He closed only to start at another place. At the CCMA his argument was that he had run bankrupt.

The script show how bribery of corrupt officials breaks down victims. Here CCMA officials were bribed to delay a process so that JSK could have sufficient time to avoid payments. However, without official documents to show bankruptcy JSK should be made to sell his personal asserts to pay up for his debts.

4.3 Cleaning and channelling the money into legitimate streams

Because the means of generating the dirty money are illicit there is certainly a lot of careful planning about its concealment and movement right to the end of rerouting it that must happen. When they acquire proceeds of crime, criminals need to find avenues to spend the money in ways that will not draw attention to them directly, to how they have acquired their proceeds and to those who have assisted them in acquiring their proceeds, as this would link them to the criminal activities. With experience, fraudsters and their accomplices improve their skills at concealing the monies. They too create new channels and technologies that will work in their favour. Criminals can, for example, buy a property for cash, sell it, and make a profit from on-selling the property. Any business, particularly those which are not mandatorily audited, are in the informal sector, and operate in townships and ruralite settlements are safer routes for redirecting money into legitimate financial/monetary streams. Schools, restaurants, carwash businesses, and home-based enterprises can be (ab)used by launderers to ‘wet clean’ and ‘dry clean’ their loot. See the positioning of this activity in the flow in Figure 3.

Figure 3.

Five steps of the money laundering activity. (Source: Author Synthesis of literature).

This is one of the evils that works against the otherwise excellent policy of indigenisation and economic empowerment of communities of the hitherto deprived and economically excluded members of the third-world (developing) community.

4.4 Rerouting the cleaned and legitimised money to the primary launderer

Shell companies are commonly used to hide away monies that would have been fraudulently gotten. A shell company is a business that is created to hold funds and/or to manage another business’s affairs mainly financial transactions. True identities of owners of the shell company are normally difficult to pick. Further complications are that they are normally without registered staff and sometimes not even a legal premises. Money launderers and criminals can have their monies held in a shell company until it is convenient for the bankers or launderers to move it to another holding entity. In 2023 an enquiry found that the Dubai Chamber of Commerce registrar had 17,500 African companies on its register. This raises suspicion as to what commercial activities such companies could be in in a foreign state. One of the trending strategies that has much success at concealing dirty money is quickly moving the money through shell companies. For instance, dirty money generated from a scam in a country A is deposited into a Trust Account (Z) in country B but managed by a shell company in country C. The Trust Account (Z) domiciled in country B, despite being managed from country C may be owned by another Trust (Y) registered in country D. Despite being registered in country D Trust (Y) would be holding an account in country E. The Trust Account (X) in country E may be managed by a banker in country F and the banker may be without an inkling who the real owner of the bank account is. This mingle is weaved by the a cross-functional team of witty ‘connoisseurs’, multi-disciplinary and well versed with the advantages in each country and how they can be exploited for the generation of dirty money, its movement, its cleaning, its rerouting, and its safekeeping. Launderers are generally dodgy and cunning. They are quick at exploiting situations, destroying trails, and shedding crocodile tears. One strategy of cleaning their monies is to run legitimate and registered businesses no matter they are not as profitable. The purposes of such businesses are to act (drycleaning) laundry machines.

JSK ran a chain of private schools in South Africa. He would create an impression of struggling businesses to the workers yet every often JSK would make huge deposits in four accounts. JSK was controlling 3 teams of cattle rustlers who would steal cattle from rural homes and farms, slaughter them overnight, ship the carcases for cutting at a connected butchery, get a receipt and transfer part of the loot to his boarding schools. Effectively JSK would have meat at low-cost, far below the market cost, which would give him a competitive advantage.

Cash-intensive businesses are excellent links and rams in the money laundering businesses. This is mainly because they are difficult for an outsider to audit. Restaurants, casinos, tuckshops, aftercare centres, carwashes, saloons can be used to look like they are the true sources of a stream of income.

JSK is a kingpin in a heist team, he finances the teams and he ‘dry cleans’ the loot using his chain of schools and tuckshops. With the schools he deposits the heist loot over ATMs as if from parents. With the tuckshops he uses two strategies: a) JSK makes payments for orders in cash, some orders are simply invoices meant to hoodwink auditors and law enforcement agencies in the case of a lifestyle audit. b) JSK pays ‘air suppliers’ and real suppliers connected with him. These would further pay out for real and ghost labour and supplies to individuals who would re-avail the money to JSK.

With casinos, launderers would get their loot exchanged for casino chips. With the bought casino chips launderers would gamble a few times then sell away the remaining casino chips and get clean receipted cash. The hard cash or bank transferred amount would now be legitimised and ‘clean’. Some casino outlets would syndicate with external agents, agents of agencies, or hard criminals. These would stream chips into a casino, get them mingled with authentic internal chips of genuine gamblers. The casino would note the amount down in their balance sheet as paid-out winnings. The key objective of this stage is blurring the audit trail and one strategy of achieving this is to create as much confusion in the money movement or trail that would be a headache for an investigating agency to piece together. Faked up and authentic transactions achieve this goal as much as does making payments in different national and international bank accounts.

4.5 Shoving the ‘cleaned money’

Fraudsters normally invest their profit further in other ventures in a seemingly legitimate way. These further transactions can make it difficult for authorities to retrace the steps to the origin of the dirty money. In attempts to conceal money movements, registration of properties and companies do play an important party. Often the primary fraudster forms a new company or buys a new company in the names of family members. They can also put their monies in Trusts and make donations where they would get kickbacks.

There are alarming trends in money laundering using cryptocurrency. Money launderers find cryptocurrency a much faster and safer way of acquiring and pushing money around in ways that are difficult to trail. Cryptocurrencies are effective throughout the 5 phases of money laundering explained above: planning, execution, cleaning, rerouting, and shoving. Assets acquired by launderers are sent from a seemingly legitimate source to an exchange or a destination address where they are then liquidated. Tracing such transactions may be sizeably difficult. On the cryptocurrency or blockchain are five common strategies that are frequently used by money launderers: gambling platforms, nested services, fiat exchanges, mixers.

Gambling platforms are popular among cryptocurrency money launderers. Launderers pay funds into the gambling platform through some combination of identifiable or anonymous accounts. The funds are then placed in bets or cashed out. The cashing out is often done in collaboration with affiliates. With this payout the money is legitimised. It can be given a further veneer of secrecy by using it to acquire virtual assets.

Nested services encompass various services operating within one or numerous exchanges where they use addresses hosted by the exchange to tape into the liquidity of the exchanges thus capitalising on opportunities to trade. Exchanges differ in strictness on meeting nested services compliance standards. Where these standards are laxy or unmonitored launderers would flock to these exchanges. Concealment is further attained because on the blockchain ledger, the transactions done through the nested services will show as having been done by their host counterparties or the exchanges. Yet they would have been carried out by the individuals’ addresses or the hosted nested services. An Over-the-Counter (OTC) broker is a form of nested services most used by launderers. OTC brokers enable traders to anonymously, securely, and easily trade large amounts of cryptocurrency. The OTC brokers, on a commission payment would facilitate direct cryptocurrency trades between two parties, without the mediation of an exchange. The ensuing trades can be agreed between different cryptocurrencies. For instance, it can be agreed to trade between Bitcoin and Ethereum, or between fiat currencies and cryptocurrencies. Once terms of trade are sealed between the parties the broker, who was not party in the negotiations, is given custody of the assets.

Fiat exchanges change crypto into cash, and may be mainstream, peer-to-peer (P2P), or non-compliant. Non-compliant are fiat exchanges that are not subjected to regulations and would not obey these regulations. In 2022 USD23.8billion was exchanged through illicit addresses. Launderers often crash in even where the exchanges follow compliance measures. Huge amounts of funds continue to find ways through entities that facilitate their concealment like the Decentralised Finance protocols or mixers.

Mixers are services that blend digital assets from multiple addresses before releasing them at random intervals to new wallets or destination addresses, effectively increasing anonymity and further blurring the audit trail. The new destination addresses or wallets would transfer the funds to major exchanges or legitimate businesses. Mixers have become cushioned conduits with money launderers who have siphoned trillions through them.

5. Trends in dealing with bribery, corruption and money laundering

Strategies that work against bribery, and corruption, by extrapolation have an anti-laundering impact. In Figure 1 we argued the similarity among the three concepts and in Figure 2 we showed how the three propel one another. Weakening the practice of bribing should weaken corruption and money laundering. Likewise attacking corruption would curb money laundering. Oyewobi et al. [7], Osisioma [4] explored the following generic strategies in the fight against corruption: statutory enactment, transparency, social mobilisation, ethical resolution, codes of conduct, conflict of interest rules, institutional arrangement, budget monitory, price intelligence units, establishment of anti-graft agencies, eliminating incentives for corruption, whistleblower protection, integrity pacts and debarment, rigorous prosecution, etc.

These aspects will be covered and embedded in the structured discussion that follows. There is evidence of trends in favour of increasing frequencies in money laundering and in the expansion of this evil into newer areas. The use of technology in money laundering activities has also increased, thus increasing the total amounts involved with individual activities of money laundering. Because money laundering in most cases involves bleeding money out of government systems, the taxpayer is implicitly robbed out by the money launderer. Another notable development is the entry of ‘money/finance connoisseurs’ in the trade or craft of money laundering. These are acting as consultants/advisers/specialists in investment analyses. They offer criminals advice and guidance on how they can evade tax, the law and conspicuity in societies they operate in and live. The connoisseurs would attend criminal cases in the courts, follow cases in the media, consult aspect specialists and this keeps them ahead of the game and the law enforcement agencies. There is an increasing stronger realisation that C⁴B (communicative, collaborative, cooperative, commitment behaviours) will help national and international and global efforts directed against money laundering and its accomplice crimes.

Commitment is one of the behaviours that matters most in a strategy that fights an evil that is perpetrated by the rogue-and-rough in the communities. Whistleblowing on a dangerous criminal is dangerous in its own. Investigating a syndicate is dangerous. Arresting a dangerous and syndicate member is dangerous. Investigating where you are also being investigated is a headache. These are some of the experiences that societies go through as they witness bribery, corruption, and money laundering in their neighbourhoods.

Far from making anti-money laundering a hopeless hope, there are pleasing trends and successes with the anti-money laundering efforts. There are sprawling coalitions of institutions, banks, countries, regional bodies and at a global level who are in C⁴B against money laundering. Notable among these players are the Egmont Group, the FATF, Europol, Interpol, UNODC. The functions of such groups are aided by attuned rules, regulations, and legal frameworks. These efforts are exemplified in the European Union by the series of Directives. Each Directive has a package of requirements, tools, and processes that are desirable on a selection of obliged and bound entities, authorities, and countries. By 2026 a cross-national agency, the Anti-Money Laundering Authority will be operational.

Most countries have been establishing multi-layered, multi-player, multi-discipline structures with multi-pronged operations that work against money laundering within and across their frontiers. Nationally some countries have an annual day on which they have national discussions and other awareness activities. The first leg in the fight against money laundering is to create awareness of what it is we call ‘money laundering’, how the professional and the layman can ‘smell’, ‘see’, and report it to the authorities. People need know to who perceived and ascertained money laundering activities are reported. To encourage further reporting it matters to keep reporter anonymous, to have regular public updates on the achievements of the anti-money laundering effort and the contribution of the broader society to it. The Zimbabwe government launched the National Anti-Corruption Strategy (NACS) for 2020–2024 to raise citizens’ awareness and empowerment in the exercise of their rights and responsibilities in the fight against bribery, corruption, and money laundering. Many other governments have done same. Improving knowledge, skills, and competences of dealing with these three evils would reap better results with education, training and a robust infrastructure of protected reporting, ethics hotlines, ethics ombudsman, whistleblowing, no-nonsense judiciary system. Meritorious appointments in corporations, government and public sector would ensure that people meet the academic, societal, ethical standards required of a bribe, corruption, and money-laundering-free country. Transparency International has national chapters that work at the country level to encourage activism against bribery, corruption, and money laundering, with such missions headed by ‘Country’ Director Generals.

As the Zimbabwe Anti-Corruption Commission, we are proud to announce that we have managed to submit cases worth 145 million United States dollars to the National Prosecuting Authority. This is in line with our vision of fighting corruption. We have also managed to arrest 247 individuals on allegations of corruption and among this figure, there are 67 high-profile cases.

In the above script Commissioner Thandiwe Mlobane, Zimbabwe Anti-Corruption Commission testifies to the need and achievement of a community-involving anti-corruption strategy.

6. Conclusion

Bribery, corruption, and money laundering are interwoven criminal activities taking increasingly complex forms across the globe. With more complicated connections among bribery, corruption, and money laundering an anti-money laundering effort needs greater and stronger collaboration among individuals, agencies, and the whole globe. A more complete understanding and appreciation of money laundering is offered through the proposed 5-phase framework which highlights the planning, execution, cleaning, rerouting, and shoving of the ‘dirty money.’ Money launderers use creative strategies and are cunning in each of the five phases.

Money laundering has a devastating effect on the financial system of nations and the world at large. As much as money laundering is multiplying, so are the mechanisms of dealing with it, and we should strive to improve the balance in favor of our own successes. We ought not to remain bystanders. The more upstanders we are in anti-money laundering activism, the better the global monetary system becomes.