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This post aims to illuminate the complexities of the layering stage in money laundering, its far-reaching implications, and the measures undertaken to combat it. Money Laundering Layering Stage in Detail. The layering stage is the second phase in the money laundering process.
The three stages of money laundering are placement, layering and integration. Placement: This involves finding a place to launder the money, usually a business or other third party. Layering: Criminals will then use bookkeeping and other practices to make the transaction appear legitimate.
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5 days ago · Layering in money laundering is the second stage, and it involves running illicit funds through several transaction layers to give it a legitimate trail. This article discusses layering in money laundering, highlighting what it means, how it is performed and the steps businesses can take to curtail it.
- HSBC's Money Laundering Scandal
- Smurfing & Structuring
- False Invoicing
- Trade-Based Money Laundering
- Shell Companies & Off-Shore Bank Accounts
- Mixers
- Privacy Coins
- Chain-Hopping
The reality is this: All the illicit money obtained from the US illegal drug trade that entered the financial system via HSBC Mexico branches was layered in hundreds (if not thousands) of nefarious schemes. But let's examine one example. And this case involves Colombian drug traffickerswho were also using HSBC Mexico branches to launder money. This...
The sanctions.io blog talked about smurfing & structuringin the layering stage of money laundering. Although different, both techniques involve breaking large amounts of illegal funds into smaller parts to minimize detection. In the HSBC Mexico case, traffickers wired funds to the US (and other jurisdictions) in smaller amounts and to numerous busi...
As discussed with the HSBC Mexico case, cartels bought and sold consumer goods to create invoices that appear legitimate. Criminal groups - with legitimate businesses within their network - may also issue false invoices for goods and services that don't exist. This technique creates a genuine-looking paper trail, but only illicit funds move around ...
TBML is similar to false invoicing. Except, the goods do exist. Either more or less of the goods or services arrive to the buyer. This over-charging or under-charging of goods effectively means dirty money moves in the direction the criminal chooses. According to Global Financial Integrity (GFI), fraudulent invoicing is the most significant compone...
According to the FATF (Financial Action Task Force), anonymous shell companiesare one of the most common tactics used in the layering stage of money laundering. Shell companies are located in jurisdictions with stringent secrecy laws - making it harder for authorities to identify the UBO(Ultimate Beneficial Owner). Criminals flow money through shel...
This technique pools multiple crypto transactions from various sources together before redistributing the funds to new addresses, often in smaller amounts, making it difficult to trace the origin of the funds. In early 2022, OFAC issued its first-ever sanctions on a virtual currency mixerfor its role in money laundering.
Privacy coins like Monero (XMR) and Zcash (ZEC) are attractive to criminals layering illicit funds because they use cryptographic techniques and algorithms that make users anonymous. Stricter regulationis on the way. But like with fiat currency - money launderers will always identify jurisdictions with favorable laws.
Chain-hopping is when criminal funds pass through multiple cryptocurrency blockchains (or coins) to conceal its origin and destination.
Dec 5, 2023 · “ The Flow of Illicit Funds: A Case Study Approach to Anti-Money Laundering Compliance ” demythologizes money laundering, decrying commonly held misconceptions—like that it must involve money—while also breaking down the basics of what it is and how it works.
Layering is a crucial stage in the money laundering process, where the aim is to confuse the paper trail and make it harder for authorities to trace the money back to its illicit source.
Layering is one of the three stages in the money laundering process. It aims to disconnect funds from their illegal source through a complex web of transactions. Layering involves changing the nature of assets and utilizing shell companies and non-traditional financial systems.
