Corruption & Money Laundering

Question 1

Globalization

Answer 1

• integration of world economics, politics & cultures
• implies the removal of barriers

Question 2

Domestic

Answer 2

pertaining to one’s own country

Question 3

Per Capita Income

Answer 3

income per person

Question 4

Developed Country

Answer 4

high per capita & industrialized

Question 5

Newly Industrialized

Answer 5

either high per capita income or industrialized, not both

Question 6

Developing Country

Answer 6

low per capita, not industrialized

Question 7

Transnational Organized Crime

Answer 7

criminal enterprise producing a profit from illicit activities

Question 8

International Crime

Answer 8

violations against the peace and security of people based on international agreements

Question 9

Illicit

Answer 9

illegal, unlawful, criminal

Question 10

Black Market

Answer 10

a system in which items are bought and sold illegally

Question 11

Embezzlement

Answer 11

money obtained and/or misused without authorization

Question 12

Nepotism

Answer 12

use of public office to benefit a family member

Question 13

Bribery

Answer 13

voluntary exchange of benefit to influence an act

Question 14

Extortion

Answer 14

• obtaining property/money using threats of harm
• usually a threat

Question 15

Influence Peddling

Answer 15

using one’s position or political influence in exchange for $ or favors

Question 16

Red Tape

Answer 16

excessive bureaucracy or adherence to rules and formalities, especially in public business.

Question 17

Money Laundering

Answer 17

the act of causing money that comes from Source A to look like it comes from Source B

Question 18

Hawala

Answer 18

• Middle East
• Trust based systems w/ ancient roots
• No paper trail
• Operate outside of gov.’s control & save on transaction fees

Question 19

Shell Company

Answer 19

• fake companies
• exist only to launder money
• provide no goods or services
• appearance of legitimate transactions through fake invoices

Question 20

Front Company

Answer 20

• small cash business (car washes, liquor stores, grocery stores)
• provide actual goods & services
• combine dirty $ w/ clean revenues

Question 21

Bank Secrecy Act

Answer 21

assistance in preventing money laundering

Question 22

Patriot Act

Answer 22

• mandatory identity checks for banking costumers
• resources for tracking underground transactions

Question 23

Financial Action Task Force

Answer 23

• 39 members
• International Policy > making organization
• Anti- money laundering “recommendations”
• Promotes a uniform method
• Discourages dealings w/ uncooperative countries

Question 24

Effect of Technology on Crime

Answer 24

the more online payments, the less likely of fraud

Question 25

Factors Increasing the Amount of a Transnational Crime in Early 1990's

Answer 25

criminals exploit their increased ability to move goods and people.

Question 26

Classification of TOCs

Answer 26

there are three levels of classification: (i) broad offense code, (ii) specific offense code, and (iii) offense modifier.

Question 27

3 Steps to Money Laundering

Answer 27

1. Placement 2. Layering 3. Integration

Question 28

Effects of Money Laundering: Social

Answer 28

Perpetuates: - fraud - drugs on the streets, drug-related crime - stain on police resources - legitimate business person loss of morale

Question 29

Effects of Money Laundering: Economic

Answer 29

Prime Targets: Developing countries Economic Policy Errors: - dirty cash artificially inflates economy - economy could collapse

Question 30

Effects of Money Laundering: Security

Answer 30

- Terrorism supporters fund terrorists via money launderng methods to maintain anonymity - Terrorist organizations fund operations via money laundering to purchase: - weapons - plane tickets - civilian assistance