Wednesday, December 27, 2023


The players

A venture capital firm in Singapore had all the indicia (Red Flags) of money laundering: transfer of control to an opaque British Virgin Islands (BVI) corporation to hide beneficial ownership, Citizenship By Investment (CBI) passports from St. Kitts for the principal, and huge amounts of capital coming in from China, yet Singaporean law enforcement authorities and regulators completely ignored these warning signs. the result was a multi-billion dollar money laundering empire that moved and cleaned an obscene amount of money before it was exposed and interdicted, and illegal gambling and internet fraud revenue shown to be the source of all this "flight capital."

Singaporean media appears to have blamed the island nation's loose regulatory scheme on certain types of investment schemes, as the government focused on Singapore increasing its role as an international money center, competing with and rivalling Hong Kong, but must not lose our focus here on the root cause of the problem: venture capital funds as great candidates for money laundering operations.

whether we are talking about hedge funds, venture capital funds or some other type of investment fund, anything intentionally located offshore, even if its headquarters is in Connecticut, has the potential to be a money laundering operation, by definition. Who are the beneficial owners? Can you even confirm them with a degree of certainty? What about the managers abroad who bring in the business? These issues must be addressed, because otherwise cleaned-up dirty money may very well be driving their train. While the vast majority of venture capital funds are legitimate, check thoroughly any that happen to be your bank clients, to avoid any unhappy surprises later. 

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.