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What are the best Money Laundering Schemes?
To keep this post quick and easy to read we’ve put all the schemes we can think of in a table and provided links to more content to find out how they work.
We’ve also provided a column explaining how the authorities, or even the banks could find out money was being cleaned.
Read on to find out what are the best money laundering schemes…
| Scheme | Resources | Sector | Detect it | Learn more |
| Cum Ex | Investment accounts. Claim tax back on dividend revenue more than once. | Investments | Track short selling and same buyer/seller chain repeatedly transacting. | Link |
| Bitcoin or other | Crypto wallet. Wash asset through bitcoin tumbler repeatedly across exchanges and borders. | Crypto | Very difficult tracing. Repeat buying and selling of Crypto with fiat currency exchanged as cash out. | Link |
| Gift Card | Purchase Gift cards with dirty money and sell them on the darknet or on exchange sites for less, cashing out. | Retail | Repeat purchases of giftcards and cash out receipts into legit accounts. | Link |
| Cash business | A restaurant, gas station, car cleaning business etc. | Retail | Over average business income. All cash deposits. Deposits from outside the business area. | Link |
| Smurfing | People to deposit cash. | Deposits | Deposits away from business area. Multiple under threshold deposits. | |
| Black Market exchange | A currency exchange network. Give dirty money to the exchange who uses it to purchase legitimate business contracts in that country. Country of origin legit business then pays for the contracts in local currency. Exchanger then gives that clean local currency to the original criminal (usually drug trafficker in Sth America) | Currency | Repeat deposits from the same exchanger. Unregistered currency exchange. High cash turnover. | |
| Hawala exchange | Similar to the above. Unregistered usually Asian market. | Currency | Similar to the above. | |
| Gig economy | Employ a Uber taxi or AirBnB owner to take bogus bookings for a fee. Keep the returned clean money. | Gig | Gig business depositing large amounts over their usual amount. Over average refunds from bookings. Vehicle tracking. | Link |
| Service sector | Sell bogus services that do not take place in return for dirty money. | Service sector | Unusual high value receipts. Out of the norm deposits. Out of the norm business. | |
| Trade business | A registered business. Under or over invoice to transfer cash without product or service | Business | Port data. Trading in risk geographies. Customs data. Credit note discrepancies. Out of sector business. | Link. |
| Trusts | Register personal assets in the trust to avoid tax. Planes, yachts. Register in tax havens and do not declare to authorities. Hide as a business asset. | Business | Asset base of trusts registered by nominee or law firms to hide beneficial owner. | |
| Shell company | Register company and use just to move money through complex transactions and loan arrangements. Have nominee directors to hide your identity or create a chain of businesses to ‘won’ each other with shares below 25% to avoid registration requirements. | Business | Complex and repeated business transaction of high value between offshore business. No natural person identification. | |
| Loans | Set up a company offshore as your employer. All payments for your work through the company. Get paid as a loan that you will never settle. They can’t tax a loan. | Business | Payments from offshore business each month with no apparent business conducted. | |
| Real Estate | Buy real estate with dirty money and hide behind offshore business as the owner. Avoid tax and clean dirty money. | Real Estate | High cost property purchase for no apparent business reason by a business. Offshore business purchasing it. No absolute beneficial owner. | |
| Rental or renovate | Buy and sell real estate within a network to move money. Purchase price improved by ‘renovations’ . Rent it to non-existent people to clean income. | Real Estate | Property in a geography nt conected to the business. Frequently offshore beneficial owner. | |
| Private ATM | Use dirty money in your atm. Withdrawals to the general public transfer the cash into banking deposits of clean money. | Business | Over average withdrawals. Over average cash deposits in the machine. Unexplained business ‘profits’. | |
| Casino | Buy chips with dirty money, place one bet and cash out with clean. | Gambling | Repeat deposits from gambling business. | |
| Mirror trading | Buy and sell the same shares through complex web of accounts to maintain net neutrality but spending dirty money and replacing with clean. | Investments | Repeat spending and returns from brokers with little in terms of revenue difference. Short term investments in what should be a long term position. | Link |
| Risk jurisdictional trading | Receiving or depositing assets in risk jurisdictions. Gold in a location that doesn’t mine it is one example. | Trade | Frequent transactions with ‘risk’ jurisdictions for no apparent business aim. | |
| Invoicing | Create fake invoices to take legitimate cash out of a business and use personally. Replace with false sales coming in. | Business | Repeated deposits to the same ‘business’ account |
Of course for all money laundering schemes there are various databases and tools to deploy to combat them. Be that a fraud or sector database. The key is to employ them in a whole solution so searches are conducted once and do not rely on human interaction to miss-spell or other.
