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Payments Through Illegal and Disguised Means, and the Misuse of Churches, Temples, NGOs, Trusts, Associations, and Foundations

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Churches, Temples, and Financial Crimes

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Abstract

Churches and temples commonly receive cash donations, a characteristic that makes them susceptible to misuse by financial criminals. To launder their criminal proceeds, money launderers transfer large sums of money in cash and stored value instruments. They also use wire transfers and black market moneychangers. In response to the misuse of churches and nongovernmental organizations, several countries, including Pakistan and India, have adopted measures to curb money laundering and terrorist financing.

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Notes

  1. 1.

    Cf. GODDARD, Terry. How to Fix a Broken Border: FOLLOW THE MONEY. Part III of III. American Immigration Council Publication. Immigration Policy Center, May 2012, p. 3.

  2. 2.

    Id. p. 4.

  3. 3.

    In www.planalto.gov.br/ccivil_03_leis/L4131.htm. Accessed July 16, 2012. The fact that the Central Bank deals more simply with amounts of up to $3,000, dispensing with the currency exchange agreement, in no way constitutes a waiver of the requirement that all debits and credits in customer accounts or through financial instruments be recorded so as to allow tracking of assets.

  4. 4.

    See www.planalto.gov.br/ccivil_03/leis/L9069.htm. Accessed July 16, 2012.

  5. 5.

    In www.planalto.gov.br/ccivil_03/Decreto-Lei/Del0857.htm. Accessed July 17, 2012.

  6. 6.

    In www.planalto.gov.br/ccivil_03/decreto-1930-1949/D23258.htm. Accessed July 17, 2012.

  7. 7.

    The International Capital and Foreign Exchange Market Regulations (RMCCI). www.bcb.gov.br/?RMCCI. Accessed July 18, 2012. Consolidate Brazil’s currency-exchange regulations. Resolution No. 3568 of May 29, 2008 is the primary regulation http://www.bcb.gov.br/pre/normativos/busca/normativo.asp?tipo=Res&ano=2008&numero=3568. Accessed July 20, 2012.

  8. 8.

    For more on the influx of new immigrants who wire money back to their countries of origin, and their profiles, see Briefing explores the factors that have influenced increases in remitting, a publication of the Inter-American Dialogue, March 20, 2012, p. 1.

  9. 9.

    See http://unidroit.org/english/conventions/1988/factoring/main.htm. Accessed July 10, 2012.

  10. 10.

    THOMPSON, Erin. The Relationship between Tax Deductions and the Market for Unprovenanced Antiquities. 33 Colum. J.L. & Arts 241 (2010).

  11. 11.

    Cf. Internal Controls and Financial Accountability for Not-for-Profit Boards. Charities Bureau. In http://www.oag.state.ny/bureaus/charities/about.html, p. 1. Accessed June 20, 2012.

  12. 12.

    Cf. I.R.C. § 170 (c) (2006).

  13. 13.

    See Mcleman v. United States (24 Cl. Ct. 109, 91–2 USTC 50, 447, 1991).

  14. 14.

    In I.R.C. § 170 (e) (3) (2006).

  15. 15.

    Provided they are also recognized as such in the U.S. tax code, also known as the Internal Revenue Code, Section 501 (c); 527; 4947 (a) (1).

  16. 16.

    Cf. www.charitiesnys.com/pdfs/statute_booklet.pdf. Accessed May 29, 2012.

  17. 17.

    Information is provided by Patricia Lobaccaro on May 16, 2012. Ms. Lobaccaro is president and CEO of BrazilFoundation, with offices at 345 7th Ave., Suite 1401, New York City.

  18. 18.

    www.nasconet.com. Accessed June 2, 2014.

  19. 19.

    The Search for Greater Accountability of Nonprofit Organizations. Summary Charts: State Nonprofit Corporation Act Requirements and Audit Requirements for Charitable Organizations (document obtained 05/16/2012 from Patricia Lobaccaro, president and CEO of the BrazilFoundation Foundation).

  20. 20.

    Cf. Terror outfit-turned ‘charity’ JuD set to come under Pak Central Bank scanner. In Asian News International, Mar 13, 2012. www.lexis.com. Accessed June 19, 2014.

  21. 21.

    In Prafulla Marpakwar. State forms cells to detect source of terror funds. Times of India. www.westlaw.com. Accessed June 19, 2014.

  22. 22.

    For more on this, see John Samuel Raja, in Ten means to put an end to black money issue. Economic Times (India). Copyright 2011 Bennett, Coleman & Co., Ltd., The Financial Times Limited, Nov. 18, 2011.

  23. 23.

    Cf. Most recent FATF report in www.gafi-fatf.org, June 22, 2012; Government plans ‘umbrella law’ to tighten scrutiny and regulation of religious trusts and NGOs. Economic Times (India). Copyright 2011. Bennett, Coleman & Co. Ltd. May 3, 2011. www.westlaw.com. Accessed June 22, 2014.

  24. 24.

    Cf. Government plans ‘umbrella law’ to tighten scrutiny and regulation of religious trusts and NGOs. Economic Times (India). Copyright 2011. Bennett, Coleman & Co. Ltd. 05/03/2011. www.westlaw.com. Accessed June 22, 2014.

  25. 25.

    See Palak Shah. Trusts, NGOs under ambit of money-laundering law. Business Recorder. Recorder Report, 09/12/2009. WLNR 17872644. www.westlaw.com. Accessed on June 23, 2014.

  26. 26.

    Id.

  27. 27.

    For more on this, see Rob Bickerton Good Cause. Canadian Underwriter. 01/25/2010. 2009 WLNR 26429376. www.westlaw.com. Accessed on June 23, 2014.

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  1. Tribunal Regional Federal 3rd Region, São Paulo, Brazil

    Fausto Martin De Sanctis

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De Sanctis, F.M. (2015). Payments Through Illegal and Disguised Means, and the Misuse of Churches, Temples, NGOs, Trusts, Associations, and Foundations. In: Churches, Temples, and Financial Crimes. Springer, Cham. https://doi.org/10.1007/978-3-319-15681-1_6

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