What proactive steps could be considered to make it difficult for money laundering to take place?

Question

What will be an ideal response?

Answer 1

Corporations should be required to provide sufficient information to allow investigators to follow money trails with greater ease: Reports should list (1) all corporate officers; (2) all stockholders or other investors; (3) all sources of investment capital, including those emanating from foreign corporations and offshore banks; and (4) all bank accounts, both foreign or domestic. Silent partnerships and fronts should be outlawed.

Existing requirements to report large sums of money transferred between and among banks should be enforced. This should apply to trust accounts, and the following should be reported: the names of everyone who has access to the money, the sources of income in the accounts, and the allocation of withdrawals. Businesses presently excluded from reporting requirements, such as restaurants, bars, and other cash-intensive entities, should be included. Interbank transfers and wire transfers to foreign banks and corporations should be reported.

Foreign currency transactions should be limited and subjected to requirements detailing where the money is going and why. Perhaps the money should be taxed as a way to discourage this practice (a type of preventive financial measure). Certainly, criminal and civil penalties for what are euphemistically called white-collar crimes should be increased drastically. Corporate executives should be licensed by the state, and those convicted of crimes should be barred from participation in public corporations, corporations engaged in interstate commerce, and so on. Surely, if the federal government can justify putting labor union locals into receivership based on the criminal records of their officers, the same should hold for brokerage houses. Independent auditing of all corporations should be mandated. The auditors should be employed by the state and paid for by a state-imposed fee on corporations.

Finally, federal prosecutors (and jurors alike) should recognize that a corrupt organization is a corrupt organization, whether it is the Mafia or a national brokerage firm. The seizure of corporate assets under the RICO Statute for criminal activities in pursuit of racketeering should become as common as the confiscation of a drug dealer's ill-gotten gains.