The process of money laundering has been discussed and it has been also indicated that the process of money laundering can be divided into basic 3 steps â€“ placement, layering and integration. These steps can happen either one by one or simultaneously, or separately.
Below is one of the notorious cases of money laundering that clearly illustrates the three steps.
In the 1980s, Eddie Antar skimmed millions of dollars from the company to hide it from the IRS. He was the owner of Crazy Eddie’s Electronics who had a very original plan, anyway. But, eventually, he and his co-conspirators decided to make better use of the money if to send it back to the company disguised as revenue. This move would inflate the reported assets of the company in preparation for its IPO.
Having travelled to Israel a number of times, he carried millions of US dollars strapped to his body and in his suitcase.
The money laundering scheme worked out by Antar worked the following way:
PLACEMENT – Antar made a series of separate deposits to an Israeli bank. Once, â€œCrazy Eddieâ€ made 12 deposits in a single day.
LAYERING – Before US or Israeli authorities noticed the unexpectedly huge balance in the account, he had transfered all the money from the Israeli bank to Panama, where bank secrecy laws are in force. From the account in Panama, Eddie Antar made anonymous transfers to numerous offshore accounts.
INTEGRATION – Antar slowly wired the money from the offshore accounts to the legitimate Crazy Eddie’s Electronics bank account, and in the account of the company the money mixed in with legitimate US dollars and documented as revenue.
All in all, â€œCrazy Eddieâ€ laundered more than USD 8 million. Antar’s scheme boosted the initial offering stock price so that his company ended up worth USD 40 million more than it if the revenue would have not been added. When Eddie Antar sold his stock, he had USD 30 million in profit. In 1992, he was found by the authorities in Israel and extradited to the US to stand trial, where he received an 8-year prison sentence.