How to Spot Professional Money Laundering Activities: A Guide for Companies

A sound client due diligence (CDD) policy is crucial for any providers offering banking, incorporation, legal or accounting services to any extent or otherwise. Compliance must play a huge role around all company decisions to accept and work with new clients, with an explicit set of rules for knowing and identifying different risk categories.

This article is intended to help corporate service providers understand and identity how money launderers typically operate in order to successfully target and stop those who are facilitating crimes being turned into profit.

Professional money launderers often work for more than one criminal organisation. When spotting such activities and alerting a Manager or the authorities assists the successful prosecution of criminal collaborators can therefore potentially impact the activity of a number of criminal clients. They typically use a variety of tools and techniques to carry out the laundering process:

  • Account management mechanisms.
  • Trade-based money laundering.
  • Underground or alternative banking platforms.

To lend a veneer of legitimacy to their activities, professional money launderers may work with corrupt individual(s) who specialise in the provision of otherwise legitimate services (e.g. bankers, lawyers, accountants) in addition to their criminal money laundering activity.

One of the distinctive features that can help define whether a suspicious client, partner or professional money launderers unique is the provision of money laundering services in exchange for a commission, fee or other type of profit. While the specialisation in providing money laundering services is a key feature of professional money Launderers, this does not mean that they are are not also involved in other, legitimate activities as part of a legally incorporated business.

Professional money launderers use specialised knowledge and knowhow to in order to circumvent loopholes within the current laws by using the following most typical activities:

  • Finding or suggesting new opportunities for criminals.
  • Assisting criminals retain the proceeds of crime.
  • Assisting criminals legitimise the proceeds of crime.

Given that professional money launderers are third-party launderers, they are often not accustomed to the offences origin (be in drug related profits, stolen funds or providing illegal services) and are generally not concerned with the origins of the money that is moved.

The areas of business typically involve (including but not limited to):

  • Consultation services.
  • Incorporation & maintenance of companies.
  • Serving as nominees for legal entities, companies or accounts.
  • Directly purchasing assets.
  • Obtaining financing & identifying investment opportunities.

More obvious areas of work can include:

  • Recruiting & managing money mules.
  • Providing false documentation.
  • Indirectly purchasing & holding assets.

Eltoma Corporate Services are offering a number of compliance services for businesses of all sizes. Contact us for more information.

The above article is purely for informational purposes and has been drafted using The FATF’s report on Professional Money Laundering. Read more here.


Cyprus:
+357 25 02 50 34
Singapore:
+65 62 47 71 92
Russia:
+7 812 458 46 22
Skype:
eltoma.0015