Wednesday, March 28, 2012


A multi-defendant case* in which criminal proceeds were bulk cash smuggled out of the Continental United States provides a valuable lesson for compliance officers in charge of due diligence at account opening. Here's a summary of the operation, and what you should take away from it:

(1) The criminal activity consisted of fraudulent cyber-bank withdrawals, which were wired into...

(2) Bank accounts of co-conspirators, known as "Money Mules" in the case, who were foreign students lawfully in the US on visas, and foreign nationals present in America on no-immigrant visas.

(3) The organisation provided bogus foreign passports to the Money Mules, which allowed them to open accounts, which received the wire transferred stolen money.

(4) The Money Mules drew out the funds in cash, and thereafter they, and others, bulk cash smuggled the funds out of the United States.

The Take Away: How on earth did these foreign nationals succeed in opening new accounts with only a (bogus) passport ? Weren't these identity documents check with Passport-Check, or equivalent, to ensure that they were not bogus ? Why weren't official secondary forms of ID required ? Weren't their Internet footprints checked, to see that the names were of individuals with web history of at least several years ? A name without a valid an extensive Internet history could be bogus, and probably is.

This sounds to me like compliance malpractise.

Remember, always require a number of secondary identification documents to back up a passport, and ensure that this individual has an Internet history going back several years.
*United States vs. Nicolay Garifulin et al, Case No.: 10-CR-000928-VM(SD NY).

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