money laundering essay pdf

To read this content please select one of the options below:

Please note you do not have access to teaching notes, a review of money laundering literature: the state of research in key areas.

Pacific Accounting Review

ISSN : 0114-0582

Article publication date: 18 March 2020

Issue publication date: 2 April 2020

The purpose of this study is to review the literature on money laundering and its related areas. The main objective is to identify any gaps in the literature and direct attention towards addressing them.

Design/methodology/approach

A systematic review of the money laundering literature was conducted with an emphasis on the Pro-Quest, Scopus and Science-Direct databases. Broad research themes were identified after investigating the literature. The theme about the detection of money laundering was then further investigated. The major approaches of such detection are identified, as well as research gaps that could be addressed in future studies.

The literature on money laundering can be classified into the following six broad areas: anti-money laundering framework and its effectiveness, the effect of money laundering on other fields and the economy, the role of actors and their relative importance, the magnitude of money laundering, new opportunities available for money laundering and detection of money laundering. Most studies about the detection of money laundering have focused on the use of innovative technologies, banking transactions or real estate- and trade-based money laundering. However, the literature on the detection of shell companies being explicitly used to launder funds is relatively scarce.

Originality/value

This paper provides insights into an area related to money laundering where research is relatively scant. Shell companies incorporated in the UK alone were identified to be associated with laundering £80bn of stolen money between 2010 and 2014. The use of these entities to launder billions of dollars as witnessed through the laundromat schemes and several data leaks clearly indicate the need to focus on illicit financial flows through such entities.

• Money laundering
• Shell companies
• Illicit activities

Tiwari, M. , Gepp, A. and Kumar, K. (2020), "A review of money laundering literature: the state of research in key areas", Pacific Accounting Review , Vol. 32 No. 2, pp. 271-303. https://doi.org/10.1108/PAR-06-2019-0065

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

• Search Search Please fill out this field.

What Is Money Laundering?

• How It Works

Types of Transactions

Electronic money laundering, the bottom line.

• Financial Crime & Fraud
• Definitions M - Z

The prevention of money laundering has become an international effort

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Money laundering is an illegal activity that makes large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to look clean. Financial institutions employ anti-money laundering (AML) policies to detect and prevent this activity.

Key Takeaways

• Money laundering disguises financial assets without detecting the illegal activity that produced them. 
• Online banking and cryptocurrencies have made it easier for criminals to transfer and withdraw money without detection.
• The prevention of money laundering has become an international effort that includes terrorist funding among its targets.
• The financial industry also has its own set of strict anti-money laundering (AML) measures in place.

Investopedia / Julie Bang

How Money Laundering Works

Money laundering is essential for criminal organizations that use illegally obtained money. Criminals deposit money in legitimate financial institutions to appear as if it comes from legitimate sources. Laundering money typically involves three steps although some stages may be combined or repeated.

• Placement: Injects the “dirty money” into the legitimate financial system.
• Layering: Conceals the source of the money through a series of transactions and bookkeeping tricks.
• Integration: Laundered money is disbursed from the legitimate account.

The Bank Secrecy Act (BSA) requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000, and report suspicious activity that might signal money laundering.

• Structuring or Smurfing : Large allotments of illegally obtained cash are divided into multiple small deposits and spread over many different accounts
• “Mules” or cash smugglers: Cash is smuggled across borders and deposited into foreign accounts
• Investing in commodities: Using gems and gold that can be moved easily to other jurisdictions
• Buying and Selling: Using cash for quick turnaround investment in assets such as real estate, cars, and boats
• Gambling: Using casino transactions to launder money
• Shell companies : Establishing inactive companies or corporations that exist on paper only

The rise of online banking institutions, anonymous online payment services, and peer-to-peer (P2P) transfers with mobile phones have made detecting the illegal transfer of money increasingly difficult. Proxy servers and anonymous software make the third component of money laundering, integration, difficult to detect as money can be transferred or withdrawn with little or no trace of an Internet protocol (IP) address.

Money can be laundered through online auctions and sales, gambling websites, and virtual gaming sites, where ill-gotten money is converted into gaming currency, then back into real, usable, and untraceable “clean” money.

Money laundering may involve cryptocurrencies , such as Bitcoin . While not completely anonymous, they can be used in blackmail schemes, the drug trade, and other criminal activities due to their relative anonymity compared with fiat currency .

AML laws have been slow to catch up to cybercrime since most laws are still based on detecting dirty money as it passes through traditional banking institutions and channels.

According to the United Nations Office on Drugs and Crime, global money-laundering transactions account for roughly $800 billion to $2 trillion annually, or 2% to 5% of global gross domestic product (GDP) . In 1989, the Group of Seven (G-7) formed an international committee called the Financial Action Task Force (FATF) to fight money laundering on an international scale. In the early 2000s, its purview was expanded to include terrorist activity.

The United States passed the Bank Secrecy Act in 1970, requiring financial institutions to report cash transactions above $10,000 or unusual activity on a suspicious activity report (SAR) to the Department of the Treasury . This information is used by the Financial Crimes Enforcement Network (FinCEN) to be shared with domestic criminal investigators, international bodies, or foreign financial intelligence units.

Money laundering was deemed illegal in the United States in 1986, with the passage of the Money Laundering Control Act. After Sept. 11, 2001, the USA Patriot Act expanded money laundering efforts. The Association of Certified Anti-Money Laundering Specialists (ACAMS) offers a professional designation known as a Certified Anti-Money Laundering Specialist (CAMS) . These individuals work as brokerage compliance managers, Bank Secrecy Act officers, financial intelligence unit managers, surveillance analysts, and financial crimes investigative analysts.

What Is an Example of Money Laundering?

Cash earned illegally from selling drugs may be laundered through highly cash-intensive businesses such as a laundromat or restaurant where the illegal cash is mingled with business cash before deposit. These types of businesses are often referred to as “fronts.”

What Are Signs of Money Laundering?

Money laundering red flags include suspicious or secretive behavior by an individual around money matters, making large transactions with cash , owning a company that seems to serve no real purpose, conducting overly complex transactions, or making several transactions just under the reporting threshold.

How Is Real Estate Used for Money Laundering?

Criminals use real estate transactions, including undervaluation or overvaluation of properties, buying and selling properties rapidly, using third parties or companies that distance the transaction from the criminal source of funds, and private sales.

How Are Cryptocurrencies Used in Money Laundering?

The U.S. Financial Crimes Enforcement Network (FinCEN) noted in a June 2021 report that convertible virtual currencies (CVCs) , or cryptocurrencies, are a currency of choice in various online illicit activities. CVCs can layer transactions and obfuscate the origin of money derived from criminal activity. Criminals use several money-laundering techniques involving cryptocurrencies, including “mixers” and “tumblers” that break the connection between an address or crypto “wallet” sending cryptocurrency and the address receiving it.

Money laundering disguises illegally obtained financial assets. Global governments and financial institutions have anti-money laundering measures in place. Online activity and digital assets have added to money laundering transactions.

United Nations Office on Drugs and Crime. “ Money Laundering .”

Office of the Comptroller of the Currency. “ Bank Secrecy Act (BSA) .”

Financial Crimes Enforcement Network. “ History of Anti-Money Laundering Laws .”

Financial Action Task Force. “ History of the FATF .”

Congressional Research Service. " U.S. Efforts to Combat Money Laundering, Terrorist Financing, and Other Illicit Financial Threats: An Overview ." Page 2.

Association of Certified Anti-Money Laundering Specialists. “ Start Your CAMS Journey Today: CAMS Frequently Asked Questions ." Select "The CAMS Certification."

Financial Transactions and Reports Analysis Centre of Canada. “ Operational Brief: Indicators of Money Laundering in Financial Transactions Related to Real Estate .”

Financial Crimes Enforcement Network. “ Anti-Money Laundering and Countering the Financing of Terrorism National Priorities .” Page 5.

• What Is Fraud? Definition, Types, and Consequences 1 of 31
• What Is White-Collar Crime? Meaning, Types, and Examples 2 of 31
• What Is Corporate Fraud? Definition, Types, and Example 3 of 31
• What Is Accounting Fraud? Definition and Examples 4 of 31
• Financial Statement Manipulation 5 of 31
• Detecting Financial Statement Fraud 6 of 31
• What Is Securities Fraud? Definition, Main Elements, and Examples 7 of 31
• What Is Insider Trading and When Is It Legal? 8 of 31
• What Is a Pyramid Scheme? How Does It Work? 9 of 31
• Ponzi Schemes: Definition, Examples, and Origins 10 of 31
• Ponzi Scheme vs. Pyramid Scheme: What's the Difference? 11 of 31
• What Is Money Laundering? 12 of 31
• How Does a Pump-and-Dump Scam Work? 13 of 31
• Racketeering Definition, State vs. Federal Offenses, and Examples 14 of 31
• Mortgage Fraud: Understanding and Avoiding It 15 of 31
• Wire Fraud Laws: Overview, Definition and Examples 16 of 31
• The Most Common Types of Consumer Fraud 17 of 31
• Who Is Liable for Credit Card Fraud? 18 of 31
• How to Avoid Debit Card Fraud 19 of 31
• The Biggest Stock Scams of Recent Time 20 of 31
• Enron: Scandal and Accounting Fraud 21 of 31
• Bernie Madoff: Who He Was, How His Ponzi Scheme Worked 22 of 31
• 5 Most Publicized Ethics Violations by CEOs 23 of 31
• The Rise and Fall of WorldCom: Story of a Scandal 24 of 31
• Four Scandalous Insider Trading Incidents 25 of 31
• What Is the Securities Exchange Act of 1934? Reach and History 26 of 31
• Securities and Exchange Commission (SEC) Defined, How It Works 27 of 31
• Financial Crimes Enforcement Network (FinCEN) Overview 28 of 31
• Anti-Money Laundering (AML): What It Is, Its History, and How It Works 29 of 31
• Compliance Department: Definition, Role, and Duties 30 of 31
• Compliance Officer: Definition, Job Duties, and How to Become One 31 of 31

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Call us @ 08069405205

Search Here

• An Introduction to the CSE Exam
• Personality Test
• Annual Calendar by UPSC-2024
• Common Myths about the Exam
• About Insights IAS
• Our Mission, Vision & Values
• Director's Desk
• Meet Our Team
• Our Branches
• Careers at Insights IAS
• Daily Current Affairs+PIB Summary
• Insights into Editorials
• Insta Revision Modules for Prelims
• Current Affairs Quiz
• Static Quiz
• Current Affairs RTM
• Insta-DART(CSAT)
• Insta 75 Days Revision Tests for Prelims 2024
• Secure (Mains Answer writing)
• Secure Synopsis
• Ethics Case Studies
• Insta Ethics
• Weekly Essay Challenge
• Insta Revision Modules-Mains
• Insta 75 Days Revision Tests for Mains
• Secure (Archive)
• Anthropology
• Law Optional
• Kannada Literature
• Public Administration
• English Literature
• Medical Science
• Mathematics
• Commerce & Accountancy
• Monthly Magazine: CURRENT AFFAIRS 30
• Content for Mains Enrichment (CME)
• InstaMaps: Important Places in News
• Weekly CA Magazine
• The PRIME Magazine
• Insta Revision Modules-Prelims
• Insta-DART(CSAT) Quiz
• Insta 75 days Revision Tests for Prelims 2022
• Insights SECURE(Mains Answer Writing)
• Interview Transcripts
• Previous Years' Question Papers-Prelims
• Answer Keys for Prelims PYQs
• Solve Prelims PYQs
• Previous Years' Question Papers-Mains
• UPSC CSE Syllabus
• Toppers from Insights IAS
• Testimonials
• Felicitation
• UPSC Results
• Indian Heritage & Culture
• Ancient Indian History
• Medieval Indian History
• Modern Indian History
• World History
• World Geography
• Indian Geography
• Indian Society
• Social Justice
• International Relations
• Agriculture
• Environment & Ecology
• Disaster Management
• Science & Technology
• Security Issues
• Ethics, Integrity and Aptitude

• Indian Heritage & Culture
• Enivornment & Ecology

Prevention of Money Laundering Act (PMLA): Importance and Concerns

Syllabus: Internal Security

  Context : The article discusses the Prevention of Money Laundering Act (PMLA), which was initially aimed at combating the laundering of drug money but has expanded to include various unrelated offences over time.

Recently, the P unjab and Haryana High Court clarified that courts can release an accused of money laundering from police custody without fulfilling the conditions mandated by the Prevention of Money Laundering Act (PMLA), 2002

What is Money Laundering ?

Money laundering is a process used to hide the origins of illegally obtained money , making it appear legitimate. It involves three stages:

• Placement , where illicit funds enter the financial system
• Layering , where funds are moved through complex transactions to conceal their source
• Integration , where laundered funds are reintroduced as legitimate.

Methods include structuring, trade-based laundering, shell companies, and real estate transactions.

About PMLA :

Need for Prevention of Money Laundering Act (PMLA):

• Global Urgency: Prompted by global concerns over drug trafficking, the PMLA was enacted to prevent the laundering of proceeds from drug crimes, in line with UN conventions.
• Establishment of FATF : Following the establishment of the Financial Action Task Force (FATF) in 1989, measures like the PMLA were adopted to combat money laundering worldwide.
• UNGA Resolution: A 1990 resolution by the UN General Assembly emphasized the need for legislation to prevent drug money laundering, prompting India to enact the PMLA.
• Narasimham Committee Recommendations : Recommendations from the Narasimham Committee highlighted the necessity of addressing money laundering within India’s financial system, contributing to the formulation of the PMLA.
• Adherence to International Standards: The PMLA aligns with international standards and recommendations, ensuring India’s compliance with global efforts to combat money laundering.
• Legislative Authority and Scope : Enacted under Article 253 of the Constitution (it empowers the government to make laws for implementing the international conventions), the PMLA enables India to remain in alignment with world standards on Money Laundering.

Amendment to PMLA: Recently in 2023, the Finance Ministry amended the Prevention of Money Laundering Act (PMLA) and rules in line with the recommendations of the FATF.

Recent amendments made to the Prevention of Money Laundering Act (PMLA):

• Defines PEPs ( Politically Exposed Persons): Individuals who have been entrusted with prominent public functions by a foreign country, thereby bringing Indian legal uniformity in line with FATF norms
• New rules mandate crypto exchanges and intermediaries dealing in virtual assets to maintain the KYCs of their clients and report suspicious transactions to financial intelligence units.
• Due diligence documentation requirements : It has now been extended. It now includes the submission of details such as names of persons holding senior management positions, names of partners, etc.
• The term ‘beneficial owner’ refers to those with the entitlement of more than 25% of shares or capital or profit of the company, which has now been reduced to 10%.
• NPOs : Reporting entities are now required to register details of the client if it’s a non-profit organization (NPO) on the DARPAN portal of NITI Aayog.
• Clarification on Proceeds of Crime : Proceeds of Crime now encompass not only property derived from scheduled offences but also from any criminal activity related or similar to the scheduled offence.
• Redefined Money Laundering : Previously dependent on a predicate or scheduled offence, money laundering is now treated as a distinct standalone crime through an amendment.

Crucial Role Played by PMLA:

Challenges with PMLA Enforcement:

• Definition of “Proceeds of Crime”: Some argue it’s overly broad, risking the inclusion of lawful transactions.
• Inclusion of Non-Drug Offences : PMLA encompasses offences beyond its original focus, diluting its purpose.
• The burden of Proof on Accused : Critics find the burden of proof unreasonably high, potentially impacting fair trials.
• Concerns of Overreach : E.g., Opposition political parties have alleged misuse of PMLA by ED to arrest party authorities including the sitting CM of Delhi
• However, in 2022, the Court upheld the validity of key provisions empowering the Enforcement Directorate (ED) to arrest, conduct searches, seizures, and attach proceeds of crime.
• Lack of Written Communication for Arrest : Arrests without written communication violate constitutional rights. Challenges in PMLA Enforcement:
• Complex Legal Procedures : Legal intricacies can lead to delays and inefficiencies in prosecution.
• Inadequate Training and Resources : Enforcement agencies may lack the necessary resources for effective implementation.

Reforming PMLA, 2002: Key Suggestions

• Parliamentary Committees: Recommended periodic reviews and amendments to the PMLA to address emerging challenges and ensure its relevance and effectiveness.
• Refinement of “Proceeds of Crime” Definition : Define “Proceeds of Crime” precisely to avoid ambiguity.
• Reassessment of Burden of Proof : Evaluate the burden of proof, ensuring fairness and constitutional rights.
• Safeguards Against Officer Overreach : Establish oversight to monitor law enforcement actions.
• Review of Stringent Bail Conditions : Streamline bail procedures without compromising investigations.
• Periodic Review and Amendment: Establish a mechanism for periodic review and amendment of PMLA.
• Enhanced Independence and Transparency of ED : Improve reporting and disclosure of ED activities.
• Public Awareness and Education : Conduct campaigns to educate the public on PMLA’s purpose and procedures.
• Consultative Approach: Engage in open dialogues to address concerns and gather diverse perspectives.

Conclusion:

The PMLA serves as a critical tool in India’s arsenal against money laundering. However, to fully leverage its potential, addressing the challenges in its implementation is essential . By strengthening the framework and execution of the PMLA , India can more effectively combat the complex and evolving nature of money laundering.

Insta Links:

• EDITORIAL ANALYSIS: Questionable searches under the Money Laundering Act

Mains Link:

Discuss how emerging technologies and globalization contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels. (UPSC 2021) 

• Our Mission, Vision & Values
• Director’s Desk
• Commerce & Accountancy
• Previous Years’ Question Papers-Prelims
• Previous Years’ Question Papers-Mains
• Environment & Ecology
• Science & Technology

An official website of the United States government

Here's how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( Lock A locked padlock ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

• The Attorney General
• Organizational Chart
• Budget & Performance
• Privacy Program
• Press Releases
• Photo Galleries
• Guidance Documents
• Publications
• Information for Victims in Large Cases
• Justice Manual
• Business and Contracts
• Why Justice ?
• DOJ Vacancies
• Legal Careers at DOJ

Purported Member Of The Cartier Family And Five Colombian Nationals Charged For Their Roles In International Money Laundering And Narcotics Conspiracies

Damian Williams, the United States Attorney for the Southern District of New York; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Kareem A. Carter, the Executive Special Agent in Charge of the Washington, D.C. Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of a Superseding Indictment charging MAXIMILIEN DE HOOP CARTIER, LEONARDO DE JESUS ZULUAGA DUQUE, a/k/a “Rey,” ERICA MILENA LOPEZ ORTIZ, and FELIPE ESTRADA ECHEVERRY, a/k/a “Pepe,” with conspiring to commit money laundering based on their alleged participation in a network that laundered millions in Tether (a stablecoin connected to the U.S. dollar), which constituted the proceeds of drug trafficking, through the U.S. to Colombia.  CARTIER is also charged with money laundering, bank fraud, engaging in a monetary transaction in property derived from bank fraud, and operating an unlicensed money transmitting business based on CARTIER’s system of U.S.-based shell companies and bank accounts that he used to operate an unlicensed over-the-counter cryptocurrency exchange.  In addition, the Superseding Indictment charges ZULUAGA DUQUE, LOPEZ ORTIZ, ALEXANDER EGIDIO AREIZA CEBALLOS, and ADRIAN FERNANDO AREIZA CEBALLOS with conspiring to import more than 100 kilograms of cocaine into the U.S.

CARTIER, who purports to be a direct descendant of the Cartier family known for luxury jewelry, was arrested on February 22, 2024, in Miami, Florida, and presented before a U.S. Magistrate Judge in the Southern District of Florida.  ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, ALEXANDER AREIZA CEBALLOS, and ADRIAN AREIZA CEBALLOS, all Colombian nationals, were taken into custody by Colombian authorities on April 30, 2024.  The case is assigned to U.S. District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “The charges brought today demonstrate this Office’s commitment to prosecuting international drug traffickers and piercing complicated money laundering networks seeking to exploit the U.S financial system.  As alleged, Maximilien de Hoop Cartier, Leonardo de Jesus Zuluage Duque, Erica Milena Lopez Ortiz, and Felipe Estrada Echeverry were members of a network that laundered millions of dollars’ worth of drug trafficking proceeds using cryptocurrency and the U.S. financial system.  Cartier is additionally alleged to have committed a series of financial offenses while working with this money laundering network that resulted in hundreds of millions of dollars’ worth of unlawful transactions.  I commend the efforts of our law enforcements partners and the career prosecutors from this Office who work tirelessly to investigate and disrupt these money laundering and drug trafficking networks.  We will continue to relentlessly protect the U.S. financial system from exploitation.”

FBI Assistant Director in Charge James Smith said: “Maximilien de Hoop Cartier and five Colombian nationals allegedly attempted to import more than 100 kilograms of cocaine and laundered hundreds of millions of dollars – including revenue from drug trafficking operations – through an unlicensed cryptocurrency exchange to transfer illicit funds from the United States to Colombia.  This alleged scheme illustrates advancements in criminals’ use of complex financial methods to conceal their profits and other nefarious activity from law enforcement.  The FBI is committed to dismantling international criminal enterprises by disrupting the flow of illegal money and narcotics across our borders.”

HSI Special Agent in Charge Ivan J. Arvelo said: “Today’s announcement serves as a reminder that criminals do not fit a certain mold.  While Maximilien de Hoop Cartier represents himself as a member of a family associated with wealth and luxury, he stands accused of executing a bank fraud scheme where hundreds of millions in criminal funds were laundered.  Both here and in Colombia, he and his co-conspirators allegedly laundered drug-trafficking proceeds to the tune of over $14 million.  I commend HSI New York’s El Dorado Task Force and our law enforcement partners for relentlessly pursuing suspected criminals regardless of their names or whereabouts.”

IRS-CI Executive Special Agent in Charge Kareem A. Carter said: “IRS Criminal Investigation is proud to have provided its financial expertise in this investigation.  CI and our law enforcement partners are committed to aggressively investigating individuals who engage in money laundering, tax fraud, and other financial crimes.”

According to the allegations contained in the Superseding Indictment, other court filings, and statements made during court proceedings: [1]

CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY are members of a money laundering network that operates in the U.S. and Colombia, among other countries (the “Network”).  The Network utilizes a system of money laundering brokers and shell companies in the U.S., Colombia, and elsewhere to, among other things, launder crime proceeds through the U.S. to Colombia.  Between in or about May 2023 and November 2023, CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, and others used the Network to launder a total of approximately $14.5 million Tether derived directly from the proceeds of drug trafficking.  In particular, ZULUAGA DUQUE, with the assistance of LOPEZ ORTIZ, coordinated and communicated with other members of the Network to convert drug proceeds into Tether to be sent to the U.S. where it was converted into fiat currency by CARTIER and delivered by wire transfers from the U.S. to shell companies in Colombia that were operated or maintained by ESTRADA ECHEVERRY and others.

CARTIER has been a member of the Network since at least about January 2020.  As part of his role in the Network, CARTIER operated an unlicensed over-the-counter cryptocurrency exchange.  Specifically, CARTIER operated and/or controlled several U.S.-based shell companies, including Bullpix Solutions LLC, Vintech Capital LLC, VC Innovated Technologies LLC, AZ Technologies LLC, Softmill LLC, and Sun Technologies LLC (the “Cartier Shell Companies”), and maintained multiple accounts for the Cartier Shell Companies at several U.S. financial institutions.  In opening these bank accounts, CARTIER misrepresented the true nature of the business of the Cartier Shell Companies — i.e. , CARTIER claimed to the banks that the Cartier Shell Companies were in the business of software or technology when, in fact, CARTIER was using the companies to operate as an unlicensed money remitting business related to the operation of a cryptocurrency exchange.  From January 2020 to the present, CARTIER’s unlicensed money transmitting business executed hundreds of millions of dollars’ worth of unlawful transactions and laundered hundreds of millions in criminal proceeds, including drug trafficking proceeds with ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY between about May and November 2023.

Finally, ZULUAGA DUQUE and LOPEZ ORTIZ conspired with ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS to import more than 100 kilograms of cocaine into the U.S.  Specifically, in about November 2023, confidential sources, at the direction of law enforcement, coordinated with LOPEZ ORTIZ and ALEXANDER AREIZA CEBALLOS for the purchase of approximately nine kilograms of cocaine paste, which was to be manufactured into cocaine before being delivered to New York.  For that purchase, ADRIAN AREIZA CEBALLOS delivered the narcotics to an undercover officer and ZULUAGA DUQUE received a commission for helping to set up the deal.  Additionally, in about February 2024, a confidential source, at the direction of law enforcement, arranged for the purchase of approximately 100 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS.  In anticipation of this deal, the Colombian National Police executed two search warrants and recovered approximately 111 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS.

*                *                *

CARTIER, 57, an Argentinian citizen who has resided France, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of money laundering, which a maximum sentence of 20 years in prison; one count of bank fraud, which a maximum sentence of 30 years in prison; one count of engaging in a monetary transaction in property derived from specified unlawful activity, which carries a maximum sentence of 10 years in prison; and one count of operating of an unlicensed money remitting business, which carries a maximum sentence of five years in prison.

ZULUAGA DUQUE, 61, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

LOPEZ ORTIZ, 42, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

ESTRADA ECHEVERRY, 38, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison.

ALEXANDER AREIZA CEBALLOS, 45, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

ADRIAN AREIZA CEBALLOS, 44, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York Field Office, HSI’s New York El Dorado Task Force, and IRS-CI, Global Illicit Financial Team.  Mr. Williams also thanked the FBI’s Legal Attaché office in Colombia; the Colombian National Police; the Department of Justice’s Office of International Affairs; the U.S. Embassy Colombia; and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorney Jennifer N. Ong is in charge of the prosecution.

The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Nicholas Biase, Lauren Scarff, Shelby Wratchford (212) 637-2600

Related Content

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSEPH ORENGO JR. was sentenced today to 12 years in prison for an attempted shooting...

Damian Williams, the United States Attorney for the Southern District of New York, announced that ÁLVARO FREDY CÓRDOBA RUÍZ was sentenced to 14 years in prison today for conspiring to...

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of KAMERIN STOKES, a/k/a “TheMFNPlug,” in connection with a scheme to hack...