The Life Settlement industry, where investors purchase existing six- seven- and eight-figure life insurance policies of elderly individuals, to ultimately realize ROI of up to 72%, is changing from its original marketplace of many small companies, to a few giants, which is bad news for compliance officers. The reason is the large companies are buying up the existing stocks of their smaller competitors, who are closing their doors, or being forced to terminate their business,and are selling their inventory.
Remember, this is an industry with zero AML/CFT compliance requirements, and most, if not all, of the smaller entities never practised effective due diligence into Source of Funds and Source of Wealth on their clients, many of whom lived abroad. This means that the remaining giants are assuming ownership of policies portion of which may have already been sold to investors, who could have already artfully cleaned their criminal proceeds.
When the policies mature (insured passes away), you can be sure that a portion of the investors receiving funds, after the company currently holding and administering the asset, have just laundered their dirty money through their life settlement placement. We humbly suggest that any compliance officer seeing what are large life insurance payouts being deposited in his or her bank make diligent inquiry to rule out that it was a life settlement, and if it was such an investment, that he commence enhanced due diligence upon the client forthwith, lest the bank later be found to have effectively cleaned a large sum which was the proceeds of crime.
If you still don't fully understand the increased threat, I invite you to attend my three-part seminar on Advanced, Esoteric and Exotic Money Laundering Tradecraft in late January, presented by TALENT IN THE CLOUD. Go to my blog for more details. The URL for the event can be found here:
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