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Authorities In Singapore Seize More Than S$1.8 billion – Here Are The Three Stages Of Money Laundering That Allowed Them To Get Away With It For So Long!

Three stages of money laundering - whistleblowing and risk management

Understand How The Three Stages Of Money Laundering Helped Criminals in Singapore Enjoy their Illicit Gains.

Let us examine the three stages of money laundering that allowed them to get away with it in light of Singapore’s seizure of S$1.8 billion in assets used to launder money. The accused in the case, who were mostly foreigners, were able to pass off illicit money as legitimate money by using the three stages of money laundering. Singapore’s decision to seize their funds and assets demonstrates its desire for a more open financial system, which would entice investors to invest there. 

The three stages of money laundering involve a cycle that is carried out repeatedly until it becomes difficult to identify the source of the money. Money can be easily transferred into the financial system and sent abroad, in this case to Switzerland, using cryptocurrency and shell companies. As multiple authorities in Singapore work together to tackle such issues where significant amounts of assets are involved, including cars, designer handbags, watches, and cryptocurrency, the investigation can last for several years prior to the raid. 

Three stages of money laundering - whistleblowing and risk management

Three Stages of Money Laundering Explained:

1)Placement:

At this stage, the money is deposited into a reliable financial system. There are several ways to accomplish this. One of the most common ways to wash money is through shipping and invoice fraud, where money is falsely moved. Money can also be blended into businesses by calculating it as part of legitimate dealings. Smurfing is also used, where one or more people break down the money into small portions and deposit them into multiple accounts. 

2)Layering: 

Layering involves multiple transactions with the goal of hiding the origins of the money and who the owner is. The transactions are made using a number of different bank accounts, both domestically and internationally, to further conceal their source. At this stage, the foreigners involved in the Singaporean raid had purchased cars, homes, watches, and jewellery.

3)Integration:

Integration is the third and final stage of money laundering. In this stage, ‘dirty money’ is used ‘legitimately’. The user can use the money without restriction and has a clear explanation of where it came from. The money in this case was integrated into the legal system as it was invested in other assets, like houses, and this allowed the criminals to profit from the money, which appeared to come from legitimate sources. 

Singapore On the International Stage:

Singapore is a significant global financial hub, and it is crucial to uphold compliance and accountability, particularly in the financial sector, in order to maintain business and investor interest. The Know Your Customer and Customer Due Diligence program in Singapore helps businesses identify and get to know their customers, which aids in the fight against money laundering. As an FATF (Financial Action Task Force) member, it ensures that it is not a haven for criminals while also enabling it to participate in initiatives to apprehend criminals with offshore bank accounts. 

The wealthy citizens of Singapore were shocked by the amount of money seized and questioned what flaws in the financial system could have allowed this. However, the truth is that money launderers constantly come up with new ways to move their money around and take advantage of any loopholes that exist. For this reason, it is crucial to update the system on a regular basis so that it can address any new methods used by criminals when laundering money.

The Three Stages of Money Laundering Are More Sophisticated Than They Sound:

Money laundering may involve quick transfers of funds, withdrawals, and deposits. Some businesses may use fake employees, while others may use fake deliveries. Due to the difficulty in identifying corrupt companies, whistleblowing is a crucial weapon in the fight. Employees can disclose financial misconduct while remaining anonymous thanks to whistleblowing. With the help of Aranea, our anonymous whistleblowing tool, you can raise concerns and receive advice on how to protect all of your rights. Click here to learn more.