GREENFIELD VS. BROWNFIELD INVESTMENT FRONT COMPANIES FOR MONEY LAUNDERING; WHICH IS BETTER/

Laundrymen often differ when it comes to which types of front companies they believe are the "safest,"meaning lowest risk of exposure, types of front companies, when moving criminal proceeds. One might draw a parallel with the choice that legitimate investors face in the international arena, whether to acquire an existing business (Brownfield), or starting up a new one from scratch (Greenfield).

Let's discuss the reasons why money launderers gravitate toward opening shell companies, using and abusing those entities for criminal purposes, and then abruptly abandoning them, then leaving them to be administratively dissolved for non payment of fees and non-filing of the names of officers and directors. Such an approach means that, outside of straw men, the clients, or anyone else linked to a criminal enterprise, is ever publicly known, as there are zero information filings.The disadvantages are that it is a new company with no prior existence, no tax and regulatory filings, as is unknown in the legitimate business community, all of which indicia give the public, and law enforcement agencies, a feeling that it is just another active business. The advantage is that a new company has no baggage which you might not know when you acquire it.

Now, let's look a the advantages of buying, obtaining control, or gaining operational power, over an existing company. You can trade on its longevity, goodwill in its specific industry or trade, credit rating, employees known to their clients and customers, and time it has been at a brick-and-mortar location, open to the public. Companies in dire need of financing, in default of loans past due, with regulatory problems, in a declining industry or economically depressed geographical area, all are susceptible to being acquired, the subject of covert partner investments, or even extortion. the end result is the laundryman gains an operational company through which to ply his dark trade.

Some money launderers use both techniques, depending on their clients' needs, the urgency of the situation, and their risk appetite. Whatever their vehicle or entity, you can catch them in the act, provided that you are intimately familiar with the wide range of tradecraft, the typologies they tend to employ, because it is those trick of their trade which, if you recognize them early on, you can shut them down. Knowledge, when it comes to AML compliance, is not only power, it is everything.