The Washing Machine: How Money Laundering and Terrorist Financing Soils Us

Nick Kochan

Texere,  May 2005

Money laundering schemes account for between two and five percent of the world's gross domestic product, according to the IMF. Such schemes are used to fund terrorists, evade taxes, sell arms, or accumulate obscene amounts of wealth. They divert money from every honest person into the pockets of criminals. Money laundering techniques are complex by design to cover up their trail. It takes perseverance, imagination, and insight to unmask these activities; however, investigative journalist and financial expert Nick Kochan does just that.

The Washing Machine takes readers deep inside the intricate world of money laundering. Kochan offers fascinating insight into, and explanation of, the murky world of illegal financial dealings over the past 30 years and the sometimes-heroic attempts to combat it. In the hands of the author, the launderers' sophistication becomes understandable and captivating, as the characters and stories woven into the explanations are brought vividly to life.

The current effort to stop this sinister financial pipeline is one of the highest-profile law enforcement activities in the world. But is it a losing battle? The Washing Machine reveals that globalization and a lack of cooperation among international law enforcement are playing directly into the hands of the criminals. This book is a wake-up call to curtail the flow of funds before the threat of economic destabilization becomes a reality.

hardcover | ISBN: 9781587991592 | Publication Date: May 2005

"This analysis of global/international laundering cases should provide policy makers, law enforcement officials, and the international community with essential information with which to better understand money laundering, money launderers and the links between the legitimate and illegitimate economies.

The Washing Machine provides an essential overview of money laundering techniques and also explores how money laundering may have potential application to institutions and professional advisors. It analyzes and investigates the compliant regimes and addresses some of the practical issues and difficulties facing institutions and countries seeking to come to grips with money laundering compliance issues." --Felix J. McKenna, Chief Bureau Officer, Criminal Assets Bureau, Dublin, Ireland

"Money makes the world go round -- but when the money comes from racketeering, drug cartels, and the arms trade, that money can stop the world in its tracks. Nick Kochan demonstrates vividly in this new book how criminals manipulate traditional commercial and financial channels to launder their funds. He describes the enormous power criminals with wealth and charisma can exercise over governments and legitimate financial and business institutions to influence, corrupt, and ultimately destroy. He shows the links between the racketeers and international terrorism and highlights the problems of law enforcement agencies across the world in catching up with the crooks and the audit trails that betray them. The size of the so-called black economy is unbelievably large. Its pernicious influence affects us all." --Rosalind Wright, Former Director, Serious Fraud Office, United Kingdom

"If money makes the world go round, then how far will an annual $2.5 trillion in criminal proceeds take it? The increasing interconnectivity of this modern world and the growing sophistication of organized crime means that money laundering has become a huge industry, one which both undermines legitimate economic systems and helps guard the mobsters against prosecution. In this elegant and wide-ranging study, Nick Kochan opens up this global business and in the process tells us much about the state of the world's finances that ought to be read widely. After all, this is not just something of relevance to the academic, policymaker, or cop: the dirtying of the world's money affects us all." --Dr. Mark Galeotti, Director, Organized Russian & Eurasian Crime Research Unit, Keele University, United Kingdom

"This is a must-read book for anyone interested in the path dirty money follows. It is written in prose that will keep the non-financial layman fascinated. Financial professionals, government investigators, and bank and brokerage compliance people should all be required to read it because of what they will learn.

Nick Kochan provides a lucid and readable account of shocking examples of money laundering which -- because of their complexity -- were impossible to follow in the daily press. His obviously painstaking research has paid off.

When you finish you will understand why so many people say the way to the center of criminal activity is to 'follow the money.'" --Jack Blum, Former Special Council to the Senate Foreign Relations Subcommittee on Terrorism, Narcotics, and International Relations, Washington, DC, USA

"Money laundering is an illicit multi-billion dollar growth industry about which most of us know too little. In this comprehensive and lively exploration of the murky side of international financial exchange, Nick Kochan reveals the threat that black money poses to the global system. His uncompromising message about the challenge for policymakers, regulators, and bankers across the world deserves to be heard." --John Plender, Senior Editor, Financial Times, London