WHAT IS THE MOST CLEVER MONEY LAUNDERING TECHNIQUE?

When I was asked this question at a lecture this past week, I stated that it was probably International Product Diversion, in which illegally returning exported US goods sold at a deep discount abroad, are relabeled to show they are not about to expire, and sold them domestically to unsuspecting grocery chains, but on further reflection, it may really be Life Insurance Settlements.

Life Settlements, are high value insurance policies that are sold on the secondary market, and wereI have seen returns as high as 72% return on investment, have been a favourite investment of money launderers serving drug cartels. These million dollar policies, which are dumped when no longer serving the needs of the insured, due to the insanely high premiums, are snapped up by big investors such as German banks and Warren Buffet, but are also targets of criminals seeking to launder their illicit profits.

If you were wondering why the American insurance industry would not refuse to disburse substantial life insurance proceeds, upon the death of an insured, to a third party, especially a known trafficker, please understand that many of these policies are held by trusts. The launderer need only change the beneficiary of the trust after purchase. The insurance company pays the trust, and is ignorant of who the new trustee and beneficiary are.

While I have acted as a compliance officer for life settlement companies, there is no AML/CFT regulation of such entities; they are a black hole through which smart laundrymen can drive their clients' millions, ultimately receiving clean insurance company funds at the end. I have a number of articles further explaining the scheme on my blog.