Is Money-laundering a Crime?

In his talk Professor Angell takes a long hard look at the present state of the relationship between business (particularly banking) and the anti-money laundering (A-ML) regulations. The International Monetary Fund estimates the global scale of money laundering as somewhere between $600 billion and $1.5 trillion annually. Now that’s a lot of money!

The authorities normally define Money Laundering as the processing of the proceeds of crime to disguise their illegal origin, in order to avoid attracting attention to both the crime and the criminals involved. However, this is a very sloppy definition because it confuses what money laundering is, with some of the dubious reasons for doing it.

Angell’s libertarian position is that although money laundering, as we know it today, was nurtured in crime, in itself it is not intrinsically criminal. Money laundering is an attempt to maintain financial privacy. It is the processing of financial transactions in order to disguise their provenance from prying eyes and grasping hands. And no eyes are more prying, no hands more grasping, than those of government. The second act of government – the first act being to create money – is stealing it from the bearer, in the form of taxation or regulation or inflation or devaluation.

Starting with a brief history of money laundering, Professor Angell describes some typical money-laundering scams. He then questions the moral position of the government who claim “the innocent have nothing to fear” and asks can we really depend on the integrity of agencies who say “trust me, I’m from the government.” Do they have alternative hidden agendas? Angell questions the claims of the ‘moral high ground’ made by government, and finds it wanting. He concludes that “it’s all about power; everything else is sheer sentimentality.”

Of course criminals and other social degenerates must be tracked down, but at what price? That price is not just a loss of liberty. There is a huge cost of complying with the anti-money regulations, and most of that cost will fall directly on businesses themselves. And worse. Many businessmen and women will inadvertently find themselves criminalized, and their company assets seized because they are breaking the new anti-money-laundering regulations without even realising it. They are totally unaware of the powers that governments have taken upon themselves to invade the privacy of both businesses and individuals. The Patriot Act in the USA, the RIP Act in the UK, and many more regulations are having far-reaching implications. Government agencies are itching to be let loose with their new weapons. With spyware on our computers, the Echelon System tapping our phones and e-mails, with Banks and Internet Service Providers meekly handing over data on their customers to government, Big Brother has well and truly arrived.

Angell intends this talk as a wake-up call to all those businesses who are sleepwalking into disaster, so he concludes by expounding a strategy for coping with the situation. This involves a short review of A-ML technology, where Angell shows that the hyperbole surrounding A-ML software obscures an approach that, although fundamentally flawed, on balance does have a limited value to the business community.