Thursday, May 25, 2023


Most compliance officers are, we hope, familiar with garden variety trade-based money laundering techniques, where laundrymen piggy-back dirty money on board legitimate international trade payments,using a variety of schemes, betting correctly that nobody will tumble to what they are doing. Generally, they are successful, as the huge volume of payments for international trade makes it doubtful that compliance officers, or law enforcement agencies, will discover their activity, and freeze the funds.

However, in the event that law enforcement does decide to closely examine specific transactions, it often is able to quickly determine that something inconsistent or suspicious is occurring, and is able to penetrate the scheme, whether through analysis of the transactions, interviewing persons who are wittingly or unwittingly facilitating the TBML technique, or just diligent investigation of front companies and shells.

Money launderers are nothing if not adaptive; they quickly react to law enforcement methods and techniques, and there is an advanced variation on TBML that they are known to create, which is quite difficult to decipher. Rather than rely upon the facilitation of legitimate co-conspirators, or totally bogus or phantom real-life shipments, it involves setting up a real brick-and-mortar business, through which to move millions of dollars each month, as needed.

The laundrymen set up two small factories or distributor facilities, one in the US and another in the country where they need to move the proceeds of crime. Shipments of goods, in either direction, occurs, with all the supporting evidence, up to and including the payment of duty. The products imported into the US are worthless, or close to it, but listed as quite valuable, justifying the wire transfers of large sums monthly, for so long as the laundrymen wish to operate the technique. Neither Customs nor any other agency can find any defects in the method, due to its real life aspects. A visit to the "factory" confirms its real life existence and operation. Think of the movie The Sting. It survives the smell and sniff test, when a banker conducts a visit, or law enforcement does a drive-by.

Alternatively, valuable goods are exported abroad BUT listed as having nominal worth; they are sold off upon arrival abroad, putting the proceeds in the hands of the laudnrymen's clients.Unless the goods exported are actually intercepted and opened, and appraised for their true value, the method escapes detection.

There are other varieties of this version, and the laundrymen often resort to changing the game to them, to fool law enforcement, and bank compliance officers, who believe these are legitimate transactions. After a short period, the entire scheme is dismantled, and the laundrymen go on to another advanced scheme. Meanwhile, they have successfully sent millions to their narcotics trafficking clients without incident.

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