Proceeds of crime refer to money/assets that have been acquired directly or indirectly through crime. Usually, money gained from committing crimes is used to buy assets, making said assets proceeds of crime. An example of this could be a car bought with stolen money, this causes the car to become criminal property, and therefore a proceed of crime.
The aims of laundering are simple: criminals make illegal money from source A, and then try and make the money look like it came from source B, a legitimate income. Criminals make the proceeds of crime appear to be legal so that they ‘blend in’ with normal life, avoid suspicion, and may continue to make money illegally.
The term “laundering” stems from the fact that criminals disperse the money gained from the crime and spread it out throughout numerous accounts and financial institutions in order to hide its origin. By doing so, it quickly becomes much more difficult for the authorities to trace money back to the crime itself, and so ‘dirty’ money (illegal money) becomes ‘clean’ and available to spend – it has been laundered.
Spotting Proceeds of Crime
Proceeds of crime may come in a number of forms, as either a sum of money, stolen goods, or assets bought with illegally obtained money. If it is money, it will usually be laundered in some way so that it can be banked and used to make investments and purchases. This tactic entails criminals essentially creating different trails for authorities to follow when trying to track down the source or destination of the money. The aim will be to disguise the money’s origins or its final destination and make it hard to prove that the money was ever part of criminal activity.
This variability of what a proceed of crime looks like means that they are very hard to spot. Over time, money laundering has developed to include offshore banking and tax evasion, all with the intention of keeping money out of the hands of the authorities and to avoid rules and regulations.
The rise of global financial markets makes money laundering easier than ever because of the ease at which you can move money between countries across the world (different countries vary in their approach and legislation around secrecy and reporting laws). This means criminals can anonymously deposit money made from a crime in one country and then have it transferred to another country to use without declaring how it came to be.
A red Ferrari and a Bentley Continental car, jewellery, watches and properties in London and the surrounding areas are among the proceeds of crime that the Metropolitan Police have recovered from criminals in the last five years. Anything that is bought with the money gained from crime becomes “tainted” straight away as a result. These are all proceeds of crime and they can all be repossessed by the police and other relevant authorities.
There are very few ways to know when somebody is benefiting from proceeds of crime, naturally, since the whole point of money laundering is to disguise this fact. One sign that something could be a proceed of crime might be that it was quickly paid for in cash, or that the person making the purchase is unlikely to be able to afford the asset taking into account their job or income.