Precious Metals Life

I was watching my regular 10 o’clock news one evening on a police investigation for the selling of cigarettes on the black market in the metropolitan area.  In the past, such news stories sparked an interest in the sense that we all know that such an activity is illegal just as the illicit street vendors on the streets of New York selling the fake High Name Brand perfumes and hand bags.

But then, the news Anchor went on to say that this cigarette smuggling was related to terrorist activities.  I was taken back for a second – saying to myself ‘What else do we have to worry about?’  A routine black market activity now linked to terrorism and our very safety in the United States?  I was a bit perplexed about this issue because of not wanting unnecessary worry being created by the Authorities.  Now not only is cigarette smoking dangerous for our health but now even the sale of smuggled cigarettes is a concern for our safety.

However, upon closer examination of the issue – perhaps the Authorities may have a reason for concern.   After reading the May 16  Tom Hays article on  ‘NY Authorities Probe Money Trial in Smuggling Ring,’  not only is money laundering involved but the financing of terrorist activities.  While money laundering is bad enough, the terrorist implication elevates this activity to a higher level of concern.

From the money laundering perspective, the funds generated from the sale of the smuggled cigarettes resulted in not paying the required tax and the cash was then placed in various banks in the Ocean City, Maryland area.  From a compliance point of view, I can only hope that the banks were running their ‘due diligence’ to question the deposits of cash into the various accounts.  And that those same banks filed Suspicious Activity Reports which in turn then alerted the Authorities as to the illegal cigarette smuggling activity.  One would hope that it was not the reverse that occurred. If it was the Authorities which caught the smugglers then had to trace the funds to the bank, then those banks would have some serious problems to address.

The terrorist connection occurs with the profits generated from the smuggled activity which is somehow directed to the militant groups like Hamas and Hezbollah according to New York State Attorney General Eric T. Schneiderman and Police Commissioner Ray Kelly.

What else do we have to worry about ?   Unfortunately for those of us in the business world, we do have to worry.  Something as simple as cigarette smuggling shows us that we really have to know well with whom we are dealing.  While we ourselves may be law abiding and ethical, unfortunately, we do have to question our counterparties even though in most if not all the time they are just as honest as we are.-Allan Ramlall