Service-based Money Laundering on the Rise, But Hard to Detect, Says State Department

By Matthew Squire

U.S. government investigators have become aware of a new subset of money laundering that takes advantage of the international market for professional services, according to a report issued by the U.S. State Department. The State Department's 2009 International Narcotics Control Strategy Report released in February, pointed to service-based money laundering as a "growing threat." Similar to the practice of trade-based money laundering, services-based laundering also involves fraudulent invoicing to move illicit funds across borders. However, unlike trade-based money laundering, no physical goods are involved in the transaction, making detection difficult for investigator and banks alike. For example, an individual looking...