COMPLIANCE OFFICERS: LOOK FOR ADDITIONAL PREDICATE ACTS WITHIN YOUR MONEY LAUNDERING INVESTIGATION. YOU WILL FIND THEM

 

If you read my recent article, How Fraud and Identity Disinformation are both Essential Components in the Money Launderer's Toolbox (October 15, 2023), you know that laundrymen employ well-constructed bogus identities, as well as engaging in fraudulent acts, all in support of their operations, but there's another aspect that frequently goes unnoticed. They often engage in any one of dozens of other crimes that can independently support a money laundering indictment. These are known as Predicate Acts. 

The case law defines Predicate Offenses, also known as Predicate Crimes, as acts which are a component of a larger crime. They are part of a larger crime if they have a purpose similar to the larger crime, and you know that there must be a predicate offense underlying any money laundering charge. It is possible that there are several predicate offenses, all of which can support that money laundering charge. They may lead you down a completely different path, if you identify them in your investigation. Use your own software tools to develop the information further.

While compliance officers know that the deposit of the proceeds of crime into a bank account constitutes a criminal offense, they should also look for additional hints of other related crimes when examining transaction records, for they may indeed literally run into the underlying crimes, the profits of which the money launderer is seeking to clean in the first place. Look back into financial transactions before the suspicious ones; is there anything inconsistent with what you know about the ordinary legitimate conduct of that specific trade or industry? If so, inquire further, and broaden your inquiry of transactions to examine who or what the target company does business with. You may uncover a criminal operation far greater than the transactions you found in the first place; Happy hunting.

If you are attending MONEY 20/20 in Las Vegas next week, you are welcome to attend my next presentation, Adopting a Criminal's Mindset to Safeguard Your Business and Minimize Risk, sponsored by Socure. Please reserve your place in advance, as it is a luncheon and seating is limited.