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Drug Wars and Coffee Housesnotes

Drug Wars and Coffee Housesnotes - Drug Wars and Coffee...

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Drug Wars and Coffee Houses Chapter 6 – Money Laundering: Money Makes the World Go Round -Illegal money that is pursued by the authorities (aka “dirty money”) is impossible to use without bringing attention to oneself, therefore the function of money laundering comes into play. -Money laundering is the process of hiding the ownership and origins of this dirty money and converting it into currency that can be used to purchase legitimate goods. -In 1996, the International Monetary Fund (IMF) suggested that the amount of money being laundered could range from US $590 billion to US $1.5 trillion. -Money Laundering involves two main actors: -The first is the one with the ill-gotten gains. -The second is the one who accepts them in exchange for some good or service or who agrees to mix the dirty money with clean money and thereby hide the fact that it is dirty. The Role of Money Laundering in the PASCS -Money laundering is something that is quite common with drugs and could even be happening at one of your neighbor’s houses without you even knowing. The Process of Money Laundering -The purpose of money laundering is always to service the needs of illegal activities and to help those activities flourish. -Money laundering surfaces wherever illegal activities generate significant amounts of income. -The money to be laundered in the PASCS originates with the consumer and goes all the way to the producer where the real money is made. -The process by which drug money is amassed and distributed among those involved in the PASCS suggests that most of the people involved in laundering money are found in the major consuming centers. (one might guess that the majority of money launderers would be found in the richest market for psychoactive substances – the United States) -One of the important ways in which dirty money leaves the United States is via international mail.
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-Besides the mail, money launderers also have begun to take advantage of traditional systems used by migrants for sending money back home. -The 1970’s saw the creation of “non-bank banks,” or financial institutions and traditional banks responded to the competition by offering services that made it easier for people to access their money directly or leverage their accounts into credit. All of this served to increase the opportunities for mixing dirty money with clean and increased the circulation of the money, making it more difficult to track once the dirty money got into the system.
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