One way criminals launder money in South Africa is by inserting stained bank notes from cash heists into slot machines at casinos.

In a study published by the Institute of Security Studies, and edited by Charles Goredema, various ways that criminals in Southern and East Africa launder money were highlighted.

Criminals would buy chips at a casino. After a short period of gambling, the gambler would return the chips in exchange for a cheque issued by the gaming institution.

Another form of laundering noted in the report was criminals using community-based rotating credit schemes like stokvels, or saving schemes like burial societies to hide their ill-gotten gains.

The Financial Intelligence Centre Act (Fica), which aims to stop the abuse by criminals of South Africa’s banking system, allows the Financial Intelligence Centre to report all suspicious transactions to the relevant authorities like the police, the taxman and other countries.

Often spending their money on cars, clothes, property and furniture, criminals are not shy when it comes to displaying their newly-acquired wealth.

Calvin Isaacs, an associate director at KPMG, said Fica was making it extremely difficult for criminals to launder money.

“Fica has laid down the law for how accountable institutions should act in the case of a suspicious transaction.”

He added, however, that informal schemes like stokvels were difficult to regulate.

Criminals often used front companies to register cars, or use family member or a business trust to register property.

Often criminals would abuse property transactions to launder money. A new client would pay money into the trust account of an attorney or agent to assist him/her in acquiring a property. A few days after the transaction the client would cancel the instructions and the money would often be repaid by cheques drawn by the attorney or agent.

During a workshop held by the Rand Afrikaans University on money laundering trends, examples were cited where, as a means of smuggling cash out of South Africa, money would be strapped to passengers on aircraft, motors vehicles or hidden in their luggage.

The National Assembly’s portfolio committee on finance is to shed some of its workload to a second committee, likely to be called the budget portfolio committee.

The finance committee will focus on all private sector financial services, money laundering, consumer protection, access by the poor to financial services, the financial services charter and regulation of the accounting profession.

This article was originally published on page 3 of The Pretoria News on May 07, 2004

Source: Independent Online (IOL)
URL: http://www.iol.co.za/index.php?click_id=13&ar…/p>