‘Rough Diamonds’, the recent television series that delves into the world of money laundering across Europe, depicts a world where criminals try to hide the illicit origins of their funds through different financial transactions. It involves the diamond industry in Antwerp, Albanian mobsters, London drug dealers, dirty money, and star-crossed lovers.
We focus on the show’s attempts to shine a light on this shadowy realm of financial crime. While the series tries to portray the process of money laundering with authenticity, inevitably, because of its need for dramatic effect, among other reasons, there are a number of inaccuracies.
First, let’s look at what they get right. The series captures the essential premise of money laundering, that anyone involved – including a wholesome, family-based diamond business – is dealing with the proceeds of illegal activities, which can be anything from drug trafficking to organised crime or worse. The show effectively explains how desperately these criminals need their dirty money to be “cleaned” to make them appear legitimate.
We also get a sense of how easy – and tempting it is – to slip into this world. I’m not revealing any spoilers to note that the main characters, the three Wolfson siblings who run the family diamond business, desperately need cash to save their century-old company, and if they have to deal with some Albanian mobsters to do that, they will. (Whether all family members fully grasp the implications of what they’re doing is unclear – and a fair depiction of how a deal like this can go down).
The series depicts the initial stage of introducing illicit funds into the financial system. The series shows characters moving large sums of money across borders or laundered through casinos and businesses. We also see what is known in the money laundering world as ‘layering’, which is how they separate the funds from their criminal origins. This happens by spinning a web of complex financial transactions. It also accurately portrays the process of integration where the laundered money is reintroduced into the economy, making it very difficult to trace where it actually came from.
The series accurately shows how shell companies and offshore accounts are used as tools in money laundering schemes. These entities are able to obscure the real beneficiaries and owners of the laundered funds, which is what actually happens in the real world.
One of the main things that could never happen in the real world is the pace at which everything happens. In reality, to avoid detection, money laundering schemes involve intricate transactions that can take place over months or even years. On the show, the money laundering schemes happen quickly – sometimes with one transaction like an exchange of cash for diamonds – and are pretty simplistic. These schemes are usually anything but an easy and quick process.
The series also makes no mention of the money laundering (ML) and terrorism financing (FT) regulations that financial institutions use to detect and prevent financial crime. In fact, in the real world, banks and financial entities are mandated to follow these regulations. They must conduct due diligence and file suspicious activity reports. On the show, no one does any of that.
‘Rough Diamonds’ makes it seem like money laundering involves criminals orchestrating the operations single-handedly. In reality, money laundering networks are extremely organised, comprising a group of people, institutions or even jurisdictions.
There can be real legal repercussions to money laundering, and we don’t really get to see that in the series. (Maybe we will in season two). Money laundering convictions can mean fines or jail time – possibly even lengthy sentences – for those involved.
‘Rough Diamonds’ does shine a light on the world of money laundering and emphasises the havoc it can cause. Even though some creative liberties were taken – investigations often take years to uncover and prosecute – it demonstrates the need for vigilance against this financial crime and robust regulations to combat what is a pervasive global issue.
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- Source: https://www.finextra.com/blogposting/24700/rough-diamonds-is-that-really-how-money-laundering-works?utm_medium=rssfinextra&utm_source=finextrablogs
