Introductory BSA AML Examiner School Manual Palm Springs 2019

Introduction

Money is “laundered” to conceal illegal activity, including the crimes that gener- ate the money itself, such as drug traf- ficking. Money laundering conceals the source of illegal proceeds so that the money can be used without detection of its criminal source. Financial institutions — including the expanding network of money services businesses (MSBs) — have been both witting and unwitting participants in laundering activities. Banks have been major targets in laundering operations because they provide a variety of services and instruments, including cashier’s checks, traveler’s checks, and wire transfers, which can be used to conceal the source of illicit proceeds. Similarly, criminals use MSBs — establishments that provide money orders, traveler’s checks, money transfers, check cashing, currency

exchange, and stored value services — to hide or disguise the origin of funds derived from illegal activity. In order to protect themselves, and to support national and international efforts against financial crime, it is important that MSBs know how money laundering schemes can operate. This guide provides some basic background information on money laundering laws, discusses actions taken in the international arena, describes sev- eral schemes that have involved financial institutions, and gives examples of certain warning signs that may help MSBs protect themselves against money launderers and other criminals.