DID YOU CATCH THE ARTFUL USE OF A SHELL COMPANY IN THE HEZBOLLAH PAGER ATTACK IN LEBANON?

While we are constantly hammering home the abuse of shell companies, shelf companies, bogus virtual charities, paper foundations and other entities that only exist for the use and benefit of the laundrymen who employ them successfully, time & time again, to deceive compliance officers, today's news about the simultaneous explosion of thousands of pagers in the hand of Hezbollah terrorists contained a reference that compliance officers should have immediately picked up on.

The Hungarian company that had the license from the Taiwanese pager manufacturer was located at an accommodation address, when media sought to find it. The company, BAC, also curiously had no profile for manufacturing, which is strange, because it was supposed to the maker of the pagers that we now know contained very small amounts of powerful explosives. Can you say shell company loud enough?

When I was a money launderer, obtaining shell companies in the British Territory of Anguilla, and in the British Virgin Islands, I could not help but noticing that the intelligence services of the world were also clients of the lawyers and accountants vending them to me. Compliance officers should be aware that there may come a time when you identify a transaction as part of a money laundering scheme, but can neither connect a well-funded operation to any individuals that are operating it, nor finding a criminal purpose for the activity.

The intelligence services of the world often use the same tradecraft as i used as a money launderer to disguise the origin of funding that they are distributing to recipients, in furtherance of a country's national policy; they must obscure the origins of that funding, to achieve plausible deniability. So if you find a transaction that simply doesn't make sense, it may very well not be conventional money laundering at all, but something else entirely. Think about that, next time you have questions but no answers.