Bank fined for being hilariously sloppy about its money laundering.

[Angilion]

I got some amusement from this. Not from the money laundering per se, which is far from unusual for banks. Lots of profit in money laundering. What amused me was the "we don't even pretend to care" sloppiness in how they did the money laundering, which is presumably what they were being fined for. People were carrying binbags full of cash into the bank for laundering. Not even a vaguely plausible attempt at concealing the laundering.

https://www.bbc.co.uk/news/business-59629711

A gold trading business suspected of money-laundering deposited £700,000 in cash into one NatWest branch in black bin bags, a court heard on Monday.

But the bank was only fined because they were so sloppy about their money laundering procedures, not for money laundering itself:

The state-backed bank was "in no way complicit in the money-laundering which took place", the judge said at Southwark Crown Court on Monday.

Not complicit in the money laundering at all - all they did was the actual money laundering.

 

[Angilion]

Par for the course as they say. What's rich is people still associate crypto as the tool for this type of activity yet it still happens in plain sight for fiat and even blatantly bad press like this gets forgot about instantly.

Laundering a few hundred million is small time for a big bank. HSBC has laundered who knows how many billions. They got caught ~10 years ago laundering vast amounts of money for drug cartels in the Americas ($881M was proven, but the figure was probably much higher)...and just carried on laundering. A fine they didn't care much about (even if they paid it) and an independent monitoring team they didn't give information to. Hardly a problem. Their share price dropped for a little while immediately after their drug money laundering was publicised, but that was only temporary.

Crypto is a far better tool for money laundering, but banks don't need to use it. They don't need money laundering to be any easier than it already is for them. They probably don't want it to be, either. Why would a bank want the competition?

 

[Angilion]

Can someone explain to me why cleaning the money is so important? Does it contain some kind of special scent or markings that means washing it is key?

It might have traces on it from being handled by peasants and no "top earner" wants that!

Just in case you're not joking, the cleaning in money laundering is metaphorical - it's "cleaning the crime off the money" by constructing a fake legal explanation for the source of the money.

 

[Angilion]

Ok mate

https://www.investopedia.com/ask/answers/022015/what-methods-are-used-launder-money.asp

The first sentence in the source you gave directly contradicts your argument that money laundering is not constructing a fake legal explanation for the source of the money:

Money laundering involves three basic steps to disguise the source of illegally obtained money and make it usable

Did you think nobody would bother clicking on the source you gave and reading even just the first sentence? I'm well aware many people nowadays are reluctant to read more than a few words at a time, but you shouldn't rely on that because it's not true for everybody. Besides, you were relying on everyone being reluctant to read even just a few words.

And yes, I'm aware that money laundering is sometimes used to disguise illegal transfers of money initially obtained legally. But the illegal transfer is still a crime and it means that the money is illegally obtained at the destination. So the laundering is still metaphorically cleaning the crime off the money by constructing a fake legal explanation for the source of the money.

If you think otherwise, feel free to say what else money laundering is. Preferably not with a link to a page that directly contradicts you in the first sentence. That's so sloppy that it would apparently serve you well as a job application to work in a bank's money laundering system.

 

[Angilion]

The pedantic correction is that money laundering isn't about creating a fake legal explanation, it's about create multiple layers of real legal explanations that obscures the underlying illegal source.

In this case the goldsmith had a very real source of the cash - they sold gold for cash. What they didn't bother doing, and the NatWest didn't bother to care about, was to ask at any point why people had so much cash. The immediate legal explanation is very much not fake.

Obviously I may be placing too much emphasis on your wording, particularly "fake legal explanation".

Edit: the only reason I care is because I have to apply these rules in my day job

I disagree with that because at some point in money laundering it's necessary for a legal explanation to be applied to money it doesn't actually apply to. Which I think makes that explanation fake. In more sophisticated laundering schemes there may well be multiple layers of genuine explanations and movements of money to obscure the key one, the one that involves a fake explanation, but I don't think that makes the fake explanation real. I think it's just using real explanations to obscure the fake one.

I think it's akin to deliberately burning a property down to claim on the insurance and saying the fire was caused by an electrical fault. An electrical fault is a real explanation for a fire, but it's not the real explanation in this example. In this example, it's a fake explanation.

Did the goldsmith in this case really sell up to £1.8M worth of gold per day from their apparently quite small shop? Or was that just what they put through the books? They don't seem to been doing a very good job of obscuring anything.

 

[Angilion]

[..] I'm pretty certain this started out as a pedantic correction that money laundering isn't about creating a fake legal explanation... I even said I was being pedantic.... I've since explained how money laundering can happen without fake legal explanations, and I stand by my pedantic correction!

Only in a situation in which no explanation is required. If an explanation is required, it will have to be a fake one.