How the mafia, triad and gang finance their activities?
In this modern society, the term “secret societies” no longer in use. Triad became popular in the Asia and South East Asia regions. Whether they are called mafia, triad or gang, these organisations are illegal organisations. For financing, mafia, triads or gangs carried out various types of illegal activities:
- Drug trafficking
- Illegal gaming
- Arms trafficking
- Human trafficking
- Contract killing
- Illegal money lending
- Protection monies
- Money laundering
See Chapter 8.5.4, Mafia, Triads and Secret Societies, First Edition, Money Laundering – A Handbook for CDD Compliance. See also Diagram 19; Main Active Chinese Organised Crime Group, Asia and South East Asia Regions.
What is an Organized Crime Group?
According to Article 2(a) of the Palermo Convention, an “Organized Crime Group” shall mean a structured group of three or more persons, existing for a period of time and acting in concert with the aim of committing one or more serious crimes or offences established in accordance with this Convention, in order to obtain, directly or indirectly, a financial or other material benefit.
How Organized Crime Group does Money Laundering?
Money laundering started way back in ancient time. At that time, there is no proper and effective AML/CFT system. Therefore, organised crime group easily penetrated into the country’s financial system. Moreover, transactions in cash for the exchange of goods and services widely practised. In the early 1990s, “Hawala” transactions gained popularity in India. Illicit money was either deposited into a bank account or purchase of luxury properties, gold, precious metal and investment in business and securities.
However, following the suppression against mafia and triads around the world, transnationally organised crime group diverts their illicit monies to legitimate businesses and investment in securities. The legitimate business types are construction, pawnshop, licensed money lending, bar and restaurant, property development and trading of listed securities.
See Chapter 4.4, Money Laundering Cycle, First Edition, Money Laundering – A Handbook for CDD Compliance.
Is Organized Crime Group a Major Player in Money Laundering?
Yes, it is. Mafia, triads and gangs are “Organised Crime Group” and is one of the dominant players in money laundering.
In 2009, UNODC estimated US41.6 trillion money laundering occurred mainly due to drug trafficking. In the same year, UNODC reported criminals might have laundered US#2.1 trillion arising from drug trafficking, counterfeiting, human trafficking and arms smuggling. See Chapter 1.6, Money Laundering Report, First Edition, Money Laundering – A Handbook for CDD Compliance.
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Categories: UNODC, UNCAC, FATF, AML/CFT Compliance, Money Laundering, Organised Crime