12 - Investigating money laundering

Summary

Our effort was mocked by some police supervisors: has the computer caught Ted yet?

Robert D. Keppel

Eve was the first money launderer

When Eve took the forbidden fruit from the tree, having been told not to, she acquired the proceeds of her crime and thus became a money launderer. You may remember this from our discussion about ‘jargon’ in Chapter 2, where we introduced the United Nations definition, which has since been transcribed, more or less unchanged, into every country's law. When she gave the fruit to Adam, they both committed another element of money laundering, transferring the property knowing it to be the proceeds of the earlier theft. At the time, police and prosecutors had not yet been created, but if they had been, they probably would not have bothered charging Adam and Eve with money laundering. This is because the fruit was gone and confiscation was not an option, given the couple did not have a fig leaf between them. Instead, they would have indicted Eve for theft and Adam for handling stolen goods (or some variation). Money laundering was always there, integral to the predicate crime, but its utility as an offence was not yet relevant. It has taken a few thousand years for the legislators to catch up – and there are two good reasons for that – social change and modern technology.

Legal origins

In 1989, the OECD commissioned a report on drug ‘money laundering’, created the FATF, and the rest, as they say, is history. The reason they decided to create the crime of money laundering was because the laws at the time could not address all the money being made from drugs. This is the ‘social change’ part that makes the crime of money laundering relevant and necessary to modern society. Interestingly, modern society has such a need for money laundering to be a crime, that it has backdated its existence to include the American gangster, Al Capone, who made a fortune from trading in illegal alcohol. Al Capone is commonly regarded as the first modern money launderer, famously using coin operated launderettes to launder the proceeds of his crime. Except this is a myth. Al Capone was convicted of tax crimes; the crime of money laundering was not created until decades later. He did not use laundromats either, not for washing money anyway.