Stage (3) Policy Advocacy Project: Money Laundering in the United States


Money laundering is one of the major challenges faced by the United States in the current times. It entails the act of giving money in an illegitimate process. Criminals have mastered ways of committing such fraudulent crimes, where banks are the most used platforms for committing the crimes. Numerous efforts have nevertheless been to disguise the nature and origin of the illicit income generated and integrated into the financial system, without drawing attention to the tax authorities or the law enforcement agencies. Most laundered money is from illegal criminal activities which include cybercrime, trafficking and corruption among many other crimes, where there is the concealment of the income from the public authorities.

Given the nature of the issue, the best approach to use is the Law Enforcement perspective, where there should be more laws and regulations enacted to help minimize the surging cases of money laundering. The issue of money laundering is a major challenge faced by not just the US, but the entire globe and hence needs sustainable solutions, which help in curbing the rate of this crime. This is since many of the criminals evade paying the taxes and use e of the cash initiative business such as casinos in concealing the origin of the funds. Despite numerous acts and legislations passed in the US, there remains a gap in the laws, which by continually enacting new ones, could greatly help in ensuring that the cases of money laundering are minimized. Having a well-laid system and laws in place can also help the country in ensuring the stability of the financial systems. It can also help the country to easily collaborate with other nations to develop and initiate a coordinated response to tackle this problem of money laundering.

Background of money laundering in the United States

Money laundering was first coined at the beginning of the 20th century. The term was used to define and label the operations that were intending to illegally conceal the incomes derived from illicit activity, hence facilitating the entry of such money into the monetary flow of the economy. Consequently, the surveillance, control and inspection entities were forced to establish priorities and developed measures of preventing the laundering of illicit income through the financial sector of the economy (Cooper, 2018). This is a practice that has been in existence since the Middle Age when usury was declared a crime. The merchants and money lenders tended to evade laws, more so usury, by covering it up through the application of ingenious mechanisms

In the US, the classic money laundering commenced in the early 20th century, where it was a result of organized crime leaders such as the famous Al Capone. Al Capone used to launder proceeds of illegal liquor and prostitution through a chain of literal laundromats. As a result, the term money laundering got born (Esoimeme, 2021). The United States, therefore, came up with measures of combating such crimes by establishing specific agencies such as the Financial Crimes Enforcement Network (FinCEN). This was at the treasury department that was used to attack and work to prevent not only money laundering but also other financial crimes and financing of terrorism. The body was established in 1990, where it sits active, and is guided by the money laundering acts and laws in place. It also recommends amendments based on the changing tactics and ways used by the launderers.

There since the coining of the term money laundering, has been multiple anti-laundering laws, which since the half-century ago there has neem many adaptations as a way of keeping u with the constant threats that money laundering pose. According to the United Nations, it is estimated that internationally, between $800 billion and $2 trillion. Is lost to money laundering (Shashiashvili, 2012). The first money laundering legislation in the US was in 1970, whose intention was to combat crime. As the nature of money laundering evolves over the decades, so has been the legislation that aims to fight it.

Some of the acts that have been in place, since the first legislation include; The Money Laundering Control Act of 1986. The act was designed to encourage foreign nation’s cooperation towards eradicating the drug trade. The law hence ensured that it assists in cases where BSA became vulnerable to civil forfeiting. It also compelled banks in the country to follow and maintain BSA reporting and also record keeping (Lam & Greenlees, 2017). Other laws included the Anti-Drug Abuse cat of 1988. Which was mainly enacted to help in the fight against drugs, and the traffickers laundering their money as a way of hiding the type of activities they engaged in. Other acts included The Money Laundering and Financial Crimes Strategy Act (1998) and The Intelligence Reform and Terrorism Prevention Act (2004) among many others. The problem of money laundering was also highlighted in 1998 by the IMF, where it estimated that the amount laundered in the US falls between 2-5% of the global GDP.


The Law Enforcement perspective is the most suitable method of minimizing the surging cases of money laundering. Anti-money laundering policies and procedures will be the best way of reducing the cases of money laundering crimes and counter-terrorism financing in the United States. This is since they will help in stopping criminals from engaging in transactions to disguise the origins of the finds which are connected to illegal activities. As much as the United States has multiple laws and regulations in place. There is a need for constant legislation, which will ensure that that the new ways and measures used by the criminals are easily detected and combatted before they cause any harm, which adversely affects the economy of the country (Dobrowolski, 2020). An example is the Bank Secrecy Act, which will require banks to have an effective AML compliance program, and also establish appropriate customer due diligence systems and programs (MACKINNON, 2020). More laws will compel the banks to screen against Office of Foreign Assets Control (OFAC) economic and trade sanctions, where they will form, effective suspicious activity monitoring and reporting process.

Better policies can help in ensuring that financial institutions comply with the regulations in place, which will consequently help in curbing the increasing threat of money laundering. The policies help in testing the tones of the organisation and also reinforce a culture of compliance. When the government constantly updates its policies, then the financial institutions are reminded of the need to be more keen and observant when dealing with large columns of transactions that they process. Relying on the policies helps the financial institutions and banks to prevent detect, investigate and also report any suspicious transactions to the law enforcing agencies, hence helping to curb the threats (Esoimeme, 2021). There are no signs of financial crimes ending, where the criminals have innovated new methods of dealing with the crimes. As a result, implementing more laws, wild ensure that the niches in the fields of crime are well dealt with, where organizations will hence be required to comply with the laws as a way of strengthening their reputation, which will consequently help in enhancing customer happiness and also aid in avoiding preventing heavy financial penalties.


Given the nature of the issue, the best approach to use is the Law Enforcement perspective, where there should be more laws and regulations enacted to help minimize the surging cases of money laundering. The enactment of new laws and policies is one of the most suitable methods of fighting crimes. This is, it will ensure that there are effective directives and strategies in place of detecting, investigating and ensuring that the crimes are combated before they cause any harm to the economy of the country. The approach will also ensure that companies, financial institutions and banks are continually careful as they handle huge sums of transactions, which the money launderer’s target as a way of hiding their criminal dealings and proceedings, which is mainly from drugs trade and terrorism.




Cooper, T. &. (2018). A Recent Overview of Anti-Money Laundering Organizations within the United States, Canada and Internationally. Journal of Management Policy and Practice. 19(3), 129-146.

Dobrowolski, Z. &. (2020). Implementing a sustainable model for anti-money laundering in the United Nations development goals. Sustainability. 12(1), 244.

Esoimeme, E. (2021). The FinCEN Files: How Anti-Money Laundering Procedures Can Identify and Reduce The Money Laundering Risks Facilitated Through The Purchase and Sale of Precious Metals, Precious Stones and Jewels. Financial Regulation International.

Lam, C. S., & Greenlees, M. (2017). Casino money laundering regulations–Macao and USA. Journal of Money Laundering Control.

MACKINNON, A. (2020). The U.S. Is a Haven for Money Laundering. That Might Be About to Change. Retrieved from

Shashiashvili, G. (2012). MONEY LAUNDERING IN THE USA CRIMINAL LAW. European Scientific Journal, 8(2).

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