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Trade-Based Money Laundering on the Rise, Say Investigators
By Brian Orsak and Kira Zalan
printLong considered one of the toughest illicit finance schemes to crack, trade-based money laundering is on the rise in response to stricter regulatory oversight of financial institutions, U.S. investigators said Monday. The method of moving ill-gotten gains, which involves the mispricing of high-dollar goods for sale to accomplices, has been "increasingly more difficult to identify" even as it has become "more prevalent," said Angela Byers, the head of the FBI's Financial Crimes Section, in a speech at the ACAMS 13th Annual AML & Financial Crime Conference in Las Vegas, NV. In one ongoing investigation, U.S. officials discovered an alleged scheme...
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Although investigators have little empirical insight into how often criminals exploit trade to transfer illicit value, the scope of trade-based money laundering is likely "overwhelming," according to John Cassara, a former U.S. Treasury Department official.
Within the cargo containers lined along American ports and the semi-trailer trucks driven past U.S. border crossings, there is at times more than just goods en route to a profitable sale. Less detectable and often hidden within the paperwork, illicit value is an occasional stowaway.
A $400 million settlement with an Israeli bank accused of facilitating tax evasion and an ongoing probe into loan fraud and AML violations at a Citigroup affiliate seemingly have little in common, but they share at least one trait: the exploitation of a typically low-risk, trade-finance instrument.
There has been modest success in a decades-long effort to minimize the exploitation of gold. In many instances, money launderers have successfully transferred illicit proceeds through gold by simply tweaking its reported value in customs documents and other records.
An expected U.N. plan to tackle illicit financial flows and other global problems could make curbing the manipulation of trade invoices an international priority.
Financial institutions continue to struggle with hiring effective Bank Secrecy Act officers, allocating sufficient compliance resources and employing adequate internal controls, U.S. regulators said Tuesday.
Mexico's partial reversal of 2010 limits on U.S. dollar deposits will make it easier for narcotics traffickers to launder drug proceeds through Mexican banks, according to current and former investigators.
In response to Mexico's restrictions on U.S. dollar deposits, drug traffickers have turned to funneling dirty money through accounts opened for seemingly legitimate businesses, American officials warned Wednesday.
Trade-based schemes and bulk cash smuggling are among the most common tactics used by international money launderers, according to Joseph Gallion, the deputy assistant director of the Financial, Narcotics and Special Operations Division for the Homeland Security Investigations (HSI).
The U.S. Treasury Department's financial intelligence unit issued guidance Thursday on how to spot and report transactions tied to trade-based money laundering, a type of crime on the rise.
Though headlines are focused on the subprime mortgage crisis and recessionary fears, criminals are still finding ways to launder funds, including through trade-based finance , says Elaine Carey, Senior Vice President and National Director of Control Risks, an independent risk consultancy office.
Mexico and the United States will create a joint trade intelligence organization to collect and analyze data on the movement of goods between the two countries as part of an effort to stem money laundering and fraud.
The Financial Action Task Force, a global financial crime watchdog is set to release three reports highlighting the methods that money launderers and terrorists can employ to exploit trade and electronic commerce and facilitate weapons proliferation.
Technological developments offer governments unprecedented ability to address trade-based crime. But there's a problem, according to Nikos Passas, a professor who studies financial crime at Boston-based Northeastern University: governments aren't utilizing available tools.
Evidence that high-profile terrorist groups are increasingly seeking to move money for their operations under the guise of legitimate trade has spurred financial experts to push for greater regulation, compliance professionals say.