Poland sees increase in money laundering investigations

The number of criminal investigations that involve money laundering increased almost six-fold within the last eight years, the Polish media reported Oct. 18.

“We have detected a rise in the number of such cases and are able to secure increasingly larger amounts of illegally gained profit, which serves to cover future penalties,” Mateusz Martyniuk, spokesman for the Prosecutor General, told the Polish daily, Rzeczpospolita.

There were 151 ongoing investigations involving money laundering in 2005, compared to 836 in 2013.

Investigators stated that the methods used to legalize profits have not changed over the years. They include the cash-incentive method for businesses whereby a company typically involved in receiving cash for services rendered, such in the running of a hotels or restaurant, uses its accounts to deposit both legitimate and criminally-derived cash.

Other frequently used money laundering schemes include money transfers abroad via fictitious companies. In this case invoices are under-or overvalued to disguise the movement of funds.

Money launderers also create invoices for fictitious consulting services and stock market operations. Criminals use illegal gains to inflate the value of a legitimate business making it appear financially healthy. An IPO is then held, and most of the shares are acquired immediately by the guilty party. They are then sold on to eager and unsuspecting investors – usually at a profit to the original buyer – meanwhile the launderer retracts funds originally injected into the company and investors are left with multiple stakes in a financially struggling company.

Investigators said that the use of frontmen is also common.

“Concealing funds gained from bank account swindles, set up on behalf of front men, is still quite a frequent method,” Krzysztof Wojdakowski from the Appellate Prosecutor’s Office in Bialystok told the paper.

Estimated funds laundered in the last five years came to PLN 6.7 bln, up from PLN 522 mln in 2007. Experts believe that these estimates do not encompass the full scale of the problem.

“Such cases are difficult to detect, and are even more difficult to prove,” a Polish criminology expert told Rzeczpospolita. “Interpol estimates that up to USD 10 bln may be laundered in Poland every year.”

The difficulty in proving that someone was engaged in money laundering practices is reflected by statistics. Out of 357 individuals facing money laundering charges in 2012, Polish courts convicted only 74.

 

Photo by Images_of_Money.