Monday, July 3, 2023


If you sincerely want to suppress money laundering at the bank where you are responsible for Anti-money Laundering Compliance, start thinking like a money launderer. Having been on that side for more than a decade, I can think of a number of things that you can do do reduce, or eliminate, the loopholes which laundrymen routinely exploit, day after day. There are literally, dozens of such vulnerabilities that they target, and attack, which I have personally used, but these I find to be significant in reducing risk:

(1) FRONTLINE COMPLIANCE STAFF WITH INCOMPLETE TRAINING: I have previously explained the importance of extensive training in money laundering Tradecraft, the actual advanced methods and strategies employed to successfully transfer, and ultimately clean, the proceeds of crime. I refer you to my previous articles on the importance of the subject, e.g. Is the Lack of Proper Tradecraft Training the Reason for Money Launderers' Success? (May 29, 2023); Money Laundering Tradecraft for Compliance Officers - a Live Presentation (June 4, 2023).See also my ongoing Tradecraft 101 series in this blog, currently published here up to Chapter 16, with more to follow.

(2) GAPS IN THE PRESENCE OF EFFECTIVE COMPLIANCE OFFICERS ON DUTY: If your senior people are not constantly on hand for in-person consultations, when needed by junior staff, reviewing files, transactions, or real-time queries by your bankers, including tellers and customer relationship officers, they will not be able to interdict potential money laundering in progress, or worse will miss something entirely. Do your experienced compliance staff take off at end of day to fight rush hour traffic, leaving the new guys to figure it out? Do you give your senior people several weeks of holidays, during which time, there is incomplete coverage and supervision? is everyone off that day for the World Cup broadcast, except the junior staff?

(3) A LACK OF INCREASED ATTENTIVENESS DURING HIGH-RISK PERIODS: Smurfs and field assistants for money laundering organizations choose busy business periods, such as Fridays, and the eve of holiday weekends, as well as the first hour your bank is open for business during the post-holiday period, calculating that everyone is sufficiently hung over or too fatigued to spot an obscure, but effective, trick or technique.

I took full advantage of dozens of these vulnerabilities and loopholes during my decade on the Dark Side, but these I have listed above can be easily remedied, provided you understand the important of cleaning up these flaws. Otherwise, money launderers will keep exploiting your bank, and when some of them are caught by law enforcement through other means, your bank's name will show up as an unwitting facilitator, and there may be consequences that your executives will not be happy about. Close these basic loopholes now, please.

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