Merchant-based money laundering Part 1: Phantom Shipments

Merchant-based money laundering Part 1: Phantom Shipments

First in a three-part series

By Keith Furst
Founder of Data Derivatives
A boutique consulting firm focused on financial crimes technology.
September 8, 2016

With editing and a brief introduction by Brian Monroe, Director of Content and Business Development at ACFCS

This is an important story looking at the creativity of criminal networks in attempting to use credit cards, rather than cash deposits, wires or ACH transactions, in laundering their illicit proceeds and moving value across international borders while hopefully evading the transactional scrutiny of ever-more aggressive anti-money laundering (AML) teams.

This is a key development for financial crime compliance teams to be aware of because, though they may be very attuned to suspicious or aberrant activity tied possible money laundering, and in tandem, well-versed in the classic red flags of credit card fraud, AML analysts may not be looking at credit card transactions as a means to launder ill-gotten gains.

With that in mind, it would behoove banks with oversight responsibility of certain credit card relationships – and potentially related third-party payment  processors and the merchant acquirers themselves, even those not subject to formal AML obligations – to start looking at credit card transactions and asking many of the same questions about if the activity could be a red flag for money laundering or the foundation of a suspicious activity report.

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