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Fueled by Recession, Use of “Factoring” to Launder Money Grows in Latin America

By Colby Adams

The use of loan service businesses to cover costs while waiting for payments for goods or services is increasingly being exploited by money launderers based in Latin America, say analysts. With lines of credit from banks having dried up because of the global recession, some businesses are selling their accounts receivable at a discount to a "factor" – an invoice finance company – to cover operating costs. "Factoring," which involves purchasing debt from the businesses and collecting on the invoices, can easily be used to launder money, they said. "Money launderers use the same routes that businesses use, and with...

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