Wednesday, December 13, 2023



There's a reason why the vast majority of money laundering activities are rarely, if ever, uncovered and discovered by bank compliance departments while in progress; Laundrymen, who know well the personal cost of failure (remember who their clients are; drug traffickers, etc.) employ what can only be described as advanced techniques, tradecraft that is on a level above what most compliance officers can recognize and suppress. They know that the garden-variety methods are not only well known to the compliance world, there are software programs specifically designed to ferret out such pedestrian techniques.

However, if they are anything, money launderers are all about innovation, to overcome whatever hurdles compliance trainings programs, and the software platforms they rely upon, can throw up against them.  They instinctively know to abandon tried-and-true mainstream conventional methods, which may have been successful in the past, but are now being regularly spotted during Transaction Monitoring.

So what do they do? To survive, and thrive, they step up their game to advanced money laundering methods, which either employ obscure tradecraft, or generally unknown as vehicles for cleaning the proceeds of crime, or actually feature something involving information that compliance officers cannot normally access.   

Some advanced techniques are not so mysterious; they are just artful permutations of something ordinary, but which have been rendered into new iterations not easily understood as money laundering typologies. For example, most compliance officers are familiar with typical trade-based money laundering methods, whereby the proceeds of crime are folded into legitimate international trade payments, in order to move the abroad, when payment is needed from North American sales of narcotics. TBML generally features a wide variety of trick used to push narco-profits into Latin America and the tax havens of the world. That's a prime example of traditional money laundering, allowing laundrymen to repatriate drug sales profits back to kingpins and traffickers, usually with a large degree of success, although there have been a number of interdictions, as the techniques are not a deep and dark secret.

Remember how we stated that some advanced techniques are nothing more than opaque improvements upon generic methods? Some laundrymen, who are charged solely with the Integration aspect of their illicit profession, take TBML and turn it inside out. Instead of using the technique to export funds with impunity, they set up pairs of bogus international manufacturing facilities, one onshore and one offshore. Their team creates plausible transactions showing exports of hi tec products, such as computer chips, the value of which cannot be ascertained unless they were actually examined by industry experts, using wildly inflated pricing showing them to be high-value products. They export these goods abroad, all properly documented and invoiced, although they are close to worthless in truth and in fact.

This ficticious cover allows them to bill their overseas "partner," who remits large sums to a company in the Continental United States. These payments, which compliance has no reason to suspect, are entered by the company, for accounting purposes, as net profits, and income taxes are duly paid. The amount that remains is the invested in purchasing that office building in a major American city or a fully leased shopping center in suburbia located on the East Coast. 

The entire transaction appears to be nothing more than a domestic US company diversifying itself with its lucrative corporate profits through a building purchase. Only if there was a mole planted inside the bogis manufacturing or export process would the entire scheme be exposed, and that's outside the scope of the compliance department at the bank for the corporation. The building is subsequently sold for a significant profit, and reinvested elsewhere in the legitimate economy.  My former  trafficking clients were involved in shopping center purchases in Canada, if you want a real example of this technique.

That is just one example of creative advanced money laundering; there many more. These techniques all need to see the light of day; Tomorrow I will explain how and when. (



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