The lack of reported Federal criminal cases involving individuals who are engaged in money laundering through Life Settlements, and the total dearth of information in the compliance industry on the subject is extremely disturbing, because this method has long been a favorite technique of narcotics traffickers seeking a nearly foolproof way to launder the proceeds of their criminal activities within the United States. Why is there no information being distributed about its use & efficacy? Because most compliance officers are not aware it exists.
Life Settlements, also known as Life Insurance Settlements, are large investments made by third parties in the lucrative secondary market for life insurance policies. We have previously detailed the Tradecraft of this technique on this blog for more than a decade. See Money Laundering through Life Settlements often eludes Detection ( January 30, 2023). The end product of the process is often a seven-figure check from any one of America's largest billion-dollar insurance companies, immediately available to invest within the Continental United States. It is definitely one of the most esoteric of the tricks in the laundryman's toolbox, only discovered by law enforcement when evidence of criminal investment in them was found, completely by accident inside the cabin of a narcotics smuggling vessel seized off the coast of California.
Having spent time handling compliance for companies vending such investments, I can verify that there is no legal requirement that such companies maintain an AML/CFT program, and that even if they have one, good laundrymen employ a number of workarounds to foil such efforts. It is recommended that compliance officers learn how to identify life settlement investments, and how to interdict the profits at the placement stage. For further information, miamicompliance@gmail.com
