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Questions and Answers
What is a key characteristic of the hawala system?
What is the primary purpose of cryptocurrency tumblers?
How do criminals manipulate international trade transactions?
What is the main advantage of using casinos for money laundering?
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What is the ultimate goal of criminals using real estate transactions for money laundering?
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Which of the following is NOT a characteristic of the hawala system?
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What is the primary function of smurfs in the hawala system?
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What is the main benefit of using cryptocurrency tumblers?
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How do criminals use real estate transactions for money laundering?
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What is the purpose of casino smurfing?
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Study Notes
Hawala System
- Hawala is an informal money transfer system used by criminals to move funds across borders without direct bank transactions.
- Smurfs act as intermediaries, receiving illicit funds in one country and arranging for equivalent amounts to be paid out to recipients in another country.
- The system relies on trust and personal connections, making it difficult for authorities to trace the flow of funds.
Cryptocurrency Tumbling
- Cryptocurrency tumblers (also called mixers) are used by money launderers to obscure the origin of illicit funds.
- Smurfs transfer cryptocurrencies through these services, which mix and shuffle transactions, making it challenging to trace the source.
- The tumblers break the link between the sender and receiver, making it harder for investigators to follow the money trail.
Trade-Based Money Laundering
- Smurfs manipulate international trade transactions to move funds across borders while disguising the illicit origin.
- They overstate or understate the value of goods in import/export documents to achieve this.
- The complexity of global trade is exploited to legitimize illegal funds.
Casino Smurfing
- Criminals use casinos to launder money by exchanging cash for casino chips, gambling a little, and then cashing out.
- The casino records the transaction as gambling winnings, legitimizing the funds.
- Casinos provide anonymity and a plausible reason for large cash transactions.
Real Estate Transactions
- Smurfs purchase real estate properties using illicit funds.
- Later, they sell the properties, claiming the profits as legitimate gains from property appreciation.
- Real estate transactions offer a way to legitimize large sums of money without arousing suspicion.
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Description
This quiz covers the criminal tactics used to conceal and move illegal funds, including the hawala system and cryptocurrency tumbling.
