TREND ROUNDUP: CRIMINALS TURNING TO ONLINE RENTALS TO LAUNDER MONEY, SOCIAL MEDIA TO ENLIST YOUTH

TREND ROUNDUP: CRIMINALS TURNING TO ONLINE RENTALS TO LAUNDER MONEY, SOCIAL MEDIA TO ENLIST YOUTH

In the last month, organized criminal groups, fraudsters and identity thieves have shown their creativity to launder money and monetize stolen credit card data, in some cases using online rental services to cleanse funds, while in others duping millennials into becoming “money mules” through sham social media job posts.

Early last month, in the aftermath of the Paul Manafort indictment, more than two dozen New York city and state lawmakers sent a letter to online home rental site, Airbnb, pressuring the company to identify and remove illegal listings on its site that could be used by thieves and criminals to launder money, according to the New York Daily News.

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MERCHANT-BASED MONEY LAUNDERING PART 3: THE MEDIUM IS THE METHOD

MERCHANT-BASED MONEY LAUNDERING PART 3: THE MEDIUM IS THE METHOD

The previous editions of this series on merchant-based explored the many manifestations of the dark side of the terminal, including suspicious transactions merchants may see that could be tied to fraud groups and the risks tied to both closed loop and open loop prepaid cards.

To read the first story, covering “phantom shipments,” please click here. To read the second story on “prepaid gift card smurfing,” please click here

Merchants can be involved with phantom shipments to move value across borders and cash can be anonymously loaded on prepaid gift cards through smurfing operations and used at US merchants to make sales revenue appear legitimate. 

The rules and actions of the payment sector have direct implications on bank anti-money laundering programs.

How? Because while banks are technically not liable for the illicit actions of their customers’ customers – the customers of a merchant or payment processor – the bank is on the hook for properly inquiring about the risk of that customer base and compliance procedures, if any, of the merchants.

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