U.S. flag

An official website of the United States government, Department of Justice.

NCJRS Virtual Library

The Virtual Library houses over 235,000 criminal justice resources, including all known OJP works.
Click here to search the NCJRS Virtual Library

Consequences of Anonymous Access to the Financial Payments System

NCJ Number
Journal of Money Laundering Control Volume: 2 Issue: 1 Dated: Summer 1998 Pages: 7-15
R T Preiss
Date Published
9 pages
This paper identifies the consequences of electronic funds transfers that permit anonymous access to the financial payments system, and proposes a strategy to prevent such access.
The paper begins with a description of an international bank fraud case that was tried in Manhattan and shows how traditional bank records enabled the prosecution to prove its case. It focuses on some of the issues that arise when modern technology is used by criminals and the challenges thereby presented to law enforcement. It also examines some of the consequences of payments systems that grant individuals anonymous access to those systems. A key component to such access is the so-called smart card. Smart cards have the technical ability to facilitate transfers of electronic cash from one smart card to another. Assuming that the smart card attains widespread acceptance, it will undermine the entire system of anti-money laundering regulation in the United States and those countries that have enacted similar record-sensitive legislation. Stated simply, there will be no records. The coming system of electronic cash and internet communication provide money launderers what they crave most, i.e., anonymity. Electronic cash cards will eliminate the record trail that law enforcement uses to apprehend money launderers. This paper proposes eliminating from commercial use any smart card issued by any business other than a bank. The issuing bank would be required to maintain retrievable records of the smart card's use by the customer. If the cardholder desires a monthly statement, he/she can pay the bank a fee. Before issuing a smart card, a bank would require a personal meeting at the bank; the bank would examine the customer's documentation such as driver's license, passport, and other identifying documents, followed by the creation of an electronically stored record of this information. The paper recommends that anonymous access to any financial payments system for the payment or receipt of large amounts of funds should be barred to all individuals and institutions. 20 references