Money Laundering Schemes Your Firm Should Know About

by Julie Mendel, Senior Product Manager | Mar 06, 2019
Money Laundering
A review of the resources available to firms make clear that anti-money laundering training and programs are a top priority for the Self-Regulatory Organizations such as FINRA and the SEC. Are you confident that all of your employees are familiar with money laundering rules and regulations? Are they aware of common money laundering schemes?

While money laundering operations continuously evolve and become more sophisticated, there are certain money laundering schemes and/or businesses that are favorites of the criminals.

Smurfing involves breaking up large sums of cash into small deposits into many different accounts to avoid detection.

Smuggling currency is one of the oldest forms of placement. Cash is often smuggled to an overseas account where it is easier to conceal the money's origin.

Casinos (or gambling) schemes involve the launderer entering a casino (or another gambling establishment) with illegally obtained money and purchasing chips to use to gamble. The criminal will then gamble for a while, eventually cashing out the chips and claiming the new cash as gambling winnings.

Life Insurance is often targeted as part of a scheme because it is less regulated than other insurance products. A typical scenario involves the purchase of a single-premium life insurance policy naming the launderer as the primary beneficiary. After what they deem is a long enough waiting period, they will cash out the policy and obtain clean money from the insurer.

Financial Instrument (bonds and securities) are a frequent target for the launderer. One common laundering scheme involves the use of bearer bonds. Bearer bonds are ripe targets because they have a certain level of anonymity leaving them vulnerable for money laundering at the point of transfer. Specifically, a bearer bond is purchased and issued; the money launderer will often deposit them into a brokerage account in and use them to purchase other assets. They sometimes turn around and liquidate them and then withdraw or wire transfer their proceeds creating another layer of the scheme before integrating the proceeds.

These instruments are also often used to hide the identity of beneficial owners of a shell company. 

Cryptocurrency such as Bitcoin, is a new tool in the launderer’s arsenal. Detection is more difficult because of the use of proxy servers and other anonymous software. These currencies can often be deposited and withdrawn with little or no detection.

This is far from an exhaustive list, and you learn more about schemes, red flags, rules, regulations, warning signs and proactive measures that are required to assist you in recognizing these schemes through a variety of our anti-money laundering training courses.

For more AML training courses or to create a training program for your firm, view WebCE's firm element training solutions. 

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