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How dictators stash their cash 101: Egypt, Libya not alone in losing assets

Switzerland says it has returned more than $1.5 billion over the past 20 years, but money laundering continues on a grand scale. 'It's like untying the Gordian knot,' says a former Department of Justice official.

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While progress is being made in the fight against money laundering – Switzerland says it has returned more than $1.5 billion over the past 20 years – the problem continues on a grand scale.

"There is no perfect country," says Theodore Greenberg, former chief of the money laundering section of the US Department of Justice. "Why did the Swiss wait until Feb. 1 to freeze Mubarak family and close associate's assets? Why not the day before, the week before, or the year before?"

The World Bank estimates $20-40 billion is stolen from developing countries each year, while a January report (pdf) from Global Financial Integrity put that figure over $1 trillion annually.

From 2000 to 2008, according to the report, China lost $2.18 trillion, Russia lost $427 billion, and Mexico lost $416 billion in illicit outflows. China lost most of that money from trade mispricing, which is when companies exaggerate the price of imports, understate exports, and pocket and launder the remainder to offshore accounts.

“We regard our figures as conservative,” said the Washington-based group’s director, Raymond Baker, a former senior economist at the International Monetary Fund.


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