Money laundering is a criminal enterprise in which criminals attempt to use legitimate businesses to process or “launder” their money.
Money laundering is often associated with drug sales, tax evasion, corruption, smuggling, the illegal arms trade, bribery, and even terrorism. While estimates of the amount of money laundered by criminals varies, the figures range from $500 billion to $1 trillion worldwide every year.
Put simply, money laundering is taking “dirty” money and making it appear “clean.” Criminals take money acquired illegally—such as by theft, drug dealing, bribes, extortion, or other means—and then layer or mix it in with regular money, using various legitimate businesses and financial institutions.
Money laundering is big business and it’s growing daily. Of course, we all know that it’s illegal—actively participating in money laundering is a good way to wind up in jail. But did you know that many businesses don’t even know that they are part of a money laundering operation?
The most successful criminals have learned to launder their money in businesses that are not even aware of what is going on. This helps them disguise the illegal funds and covers up the audit trail from investigators.
Potential red flags may include customers who:
- Open multiple accounts for a single person.
- Open multiple accounts registered to the same address, telephone number, e-mail, or similar information.
- Violate transaction or account limits.
- Process excessive credits to an account with little or no spending.
- Process multiple transactions on the same day from different sources.
- Are unwilling to provide required identification information or want to void the transaction after identification is requested or required.
- Use different identification with name variations or use identification documents that appear altered.
Everyone is responsible for complying with the laws and regulations designed to prevent money laundering. In order to fulfill your responsibilities, you must:
- Prevent: Operate within ethical expectations to prevent noncompliance.
- Detect: Keep a sharp eye out for activities that are suspicious in nature, whether they are odd transactions, mismatched information, or any of the other signs of potential money laundering.
- Report: Always report any suspicious activities using our incident reporting procedures.
- Correct: Always correct noncompliance to protect our organization and save money.