Spotting the red flags/the money laundering indicators is one way to search for hidden assets.  The red flags may help you sniff out money or other assets concealed in matters ranging from a high net worth divorce to a securities fraud.  Financial Intelligence Units part of the Egmont Group employ red flags to search for money hidden across the globe by terrorist financiers; narco-traffickers; kleptocrats & others.  As more fully set forth here, red flags include:¹

1. Large-scale cash transactions.
2. Atypical or uneconomical fund transfer to or from foreign jurisdiction.
3. Unusual business activity or transaction.
4. Large and/or rapid movements of funds.
5. Unrealistic wealth compared to client profile.
6. Defensive stance to questioning.

The case study below, (sanitized for privacy reasons), is also from the Egmont Group.²  It is about a homicide; public corruption; fraud; & the laundering of $9.5 million dollars in “Economy F.”  The money was washed through a corporate bank account; lawyers’ trust accounts; & bank accounts belonging to money mules.  The Financial Intelligence Unit (“FIU”) involved in the case analyzed Suspicious Transaction Reports (“STRs”); issued orders freezing monies; etc.

ECONOMY F: A CASE STUDY

     The Economy F police received a criminal complaint from a government department involving fraud and theft. The facts related to the predicate offenses indicated that staff working in the government department colluded with an external crime syndicate to assist in obtaining copies of legitimate vendor payments, which were subsequently duplicated and processed to the benefit of various accounts indirectly linked to the syndicate. The initial loss exposure amounted to approximately US$573,000. Police requested Economy F’s FIU’s assistance in blocking the accounts that received the proceeds of crime, with an additional request to identify other possible players.

     The FIU interacted with the relevant accountable institutions and subsequently issued several postponement orders, resulting in US$317,000 of the initial proceeds being secured. This enabled the prosecuting authority to obtain a preservation order to secure the proceeds. These interventions were brought immediately after the police provided proof of the nexus between the criminal offense and the funds that were still available in the identified bank accounts.  Upon analysis of the STRs and bank records received of the accounts, the FIU identified various other payments originating from different government departments, which were unknown to the police at that stage, amounting to US$9.5 million.

Continue Reading An Asset Search Seeking Laundered Money Hidden Across The Globe