Misuse of banking system

Subject operates a shipping company in Country A and is known to be involved in drugs as he was previously arrested in a Country B for possession of controlled drugs. The FIU in Country A has received two separate Suspicious Activity Reports on the subject and has kept the subject under observation since the FIU’s inception.

The FIU in Country A received intelligence that the subject was engaged in drug trafficking activities in Country C and was in the process of transporting a large amount of cash from Country C to Country A as payment for the drugs shipped to that country.

The FIU in Country A continued to monitor the activities of the subject and learnt that the subject purchased a vessel in Country D where he is known to have businesses. The intelligence suggested that the subject was in the process of using that vessel to transport illicit cash from Country C to Country A.

The FIU in Country A subsequently conducted an operation in which two vessels suspected to be owned by the subject but registered in the names of other individuals were searched. During the search the sum of US$1.75 million was found hidden in a compartment on one of the vessels. The FIU in Country A conducted investigations and detained the cash. The two vessels were restrained.

Further investigations conducted by the FIU revealed that the subject had purchased several vehicles and land in the names of close relatives and friends, some of whom did not have license to drive these vehicles and did not have any knowledge that these assets existed.

Investigations also revealed that the subject borrowed large sums of cash (loans) from Bank 1 in Country A to purchase these assets in the names of family members and rapidly repaid these loans before the allocated time period.

The two vessels that were restrained by the FIU in Country A were also registered in the names of third parties who appeared to be fictitious individuals.

Three individuals were arrested and charged under the money laundering legislation in Country A and are awaiting prosecution.


Cross-border transportation of cash and bearer’s negotiable instrument.

  • Use of nominees, trusts, family members and third parties.
  • Use of fictitious names to register assets.
  • Misuse of Financial Institutions: The subject borrowed legitimate money from the financial institution, which would create the paper work for a loan or a mortgage. This creates an illusion that the funds are legitimate, however the loan was repaid before the allotted time with cash derived from criminal activities.

Misuse of Money Remittance Businesses

On Friday 15th March, 2012, members of the Police Force were on patrol duty in County called States Side. State Side is known to be a major producer and supplier of illicit drugs. Whilst on patrol duty the Officers observed three (3) men walking along the public road. These men are known to the Officers and are suspected to be involved in the drugs trade. Upon recognizing the Officers the three men began walking away. The Officers became suspicious and conducted a search on the three men.

During the search of the men, the Officers recovered a quantity of cash and documents showing the origin of the money. The documents recovered showed that the three men had received the money from a Country known as Sunny Vale. Sunny Vale is known to be the largest importer of illicit drugs produced and supplied by States Side. Data in the possession of the Authorities in States Side shows that many of citizens from Sunny Vale has been arrested and charged drug offences committed in States Side. The data also shows that numerous residents from States Side has been arrested and found with cash in their possession. They could not provide any evidence to show that the money was derived from legitimate means or was intended for lawful conduct.

The three men when questioned about the monies in their possession. They informed the Officers that the monies were legitimate and belonged to them and they had not gone together to collect the monies. The three men indicated that the monies were sent to persons in Sunny Ville to conduct legitimate businesses, however the individuals in Sunny Vale, returned the monies. When questioned about the senders of the monies, the three men indicated that they did not know the senders of the monies. The monies were seized from the men and the matter was reported to Financial Intelligence Unit (FIU) of States Side for further investigation.

Analysis of the documents that were seized from the me revealed that the three men collected the monies from the same senders in Sunny Vale although indicating that they were collecting the monies for themselves and had not gone together to collect the monies. The investigation also revealed that the Recipients and senders of the monies are known to be involved in the illicit drug trade and even has convictions for drug offences.

When questioned about the money in his possession one of the subject from whom the monies were seized indicated that he instructed the sender monies in Sunny Vale to send the monies to multiple Recipients as he did not want the transaction reported. He stated that the person who was sending the monies used multiple persons to send the monies. He further stated that he knows that the transaction amount to be reported was US$10,000.

The investigation conducted also showed that the monies were collected by the three individual just mere minutes apart. Information received by the FIU in States Side also revealed that the monies were collected for one individual.


Smurfing: The act of using several runners/ customers to conduct transaction to avoid reporting by Regulated Institution.

Structuring: Structuring is the act of altering a financial transaction to avoid reporting.

Third Parties: The use of third parties to conduct transaction so as to avoid detection.

Know Your Customer/ Customer Due Diligence: Regulated institution should know their Customers by conducting the necessary Customer Due Diligence check.

Economic Justification: There is no economic justification for the transaction (s) performed or they are incompatible with the transaction (s) being performed. In this typology, the three men indicated that they sent the monies to Sunny Vale to purchase vehicular parts, however they had no knowledge as to the cost of these vehicle parts. The monies were returned to them as parts were not available in Sunny Vale. Investigation conducted revealed that the parts were available in States Side and were being sold for less of the amount of monies the men had in their possession. It would have been therefore more expensive to purchase the vehicle parts in Sunny Vale, considering the cost of shipping and other expenses that would have been incurred.

Misuse of Money Remittance Agency

Subject operates a Mom and Pop shop in Neverland. The subject is not known to local law enforcement officials to be involved in controlled drugs. The subject is brought to the attention of the FIU in Neverland as a result of the filing of a Suspicious Activity Report (SAR) by a Money Remittance Agency. The Report indicated that the subject has been collecting large and consistent amounts of cash through the money remittance agency from Someland. During that period, the Money Remittance Agency continuously filed SARs with the FIU of Neverland.

The FIU in Neverland analyzed these SARs and conducted investigation into the affairs of the subject. Checks were made at various agencies including the Customs Department in Neverland. Information received that the subject is not involved in the exportation of any goods or provides any service between Neverland to Someland to warrant the receipt of such large and consistent amounts of cash.

The information from the Customs Department however showed that the subject is involved in the importation of goods from Someland, meaning that cash should flow in the opposite direction from Neverland to Someland.

The FIU conducted a financial investigation into the subject's background and found that the subject does not own any real assets in Neverland.

The FIU in Neverland applied to the Court and was granted a Production Order to obtain financial information on the subject and her immediate family from Financial Institutions and the Money Remitters operating in Neverland.

The information provided by these institutions were analysed by the FIU and revealed that the subject operates several accounts which were dormant and have minimal balances including accounts for her family.

Information received from the Money Remittance Agencies revealed that the subject is estimated to have collected over NL$711,941 over a three year period from multiple senders in Neverland. The information also showed that the subject has never collected any other monies from any other territories. The information also revealed that the subject collected more than one transaction within a day or sometimes collected up to three transactions with a week.

At no given time did she collect more than NL$10,000 on a particular transaction.

The FIU Neverland continued its investigation by contacting the FIU in Someland and informed them of their investigation. They requested of the FIU in Someland information on the identities, employment history and criminal history of the sender of the monies to the subject. The FIU in Neverland was informed that the senders of the monies are known to law enforcement and are suspected to be involved in drug trafficking. Some have even been convicted of drug trafficking offences.

The FIU in Neverland has since not been able to identify assets belonging to the subject and believes that the subject is being used to collect the monies on behalf of another person.


  • Misuse of Money Remittance Agencies.
  • Use of Individual with apparent legitimate enterprise (Mom and Pop shops) to move and transport and launder dirty money.
  • Structuring: Structuring includes the act of parceling large financial transactions into smaller transactions to avoid scrutiny by regulators or law enforcement. The subject deliberately acted to collect less than EC$10,000 at a given time to avoid scrutiny.
  • Know Your Customers (KYC): Check to see what type of business your client are into and see if they are in a position to generate that amount of funds.

Smuggling of Cash at Ports of Entry

Law Enforcement and Customs Officers were on duty at a Port in Newland examining cargo from other jurisdictions. Whilst on duty one the Law Enforcement Officers observed Mrs. W, the wife of Mr. W a known Narcotics trafficker, arrive at the Port to collect a box.

The box was examined by one of the Law Enforcement Officers who observed it came from Oldland, one of the countries that Mr. W is suspected of trafficking in Narcotics. The Officer examined the box and observed it contained groceries and other items.

The Officer examined the food items in the box and proceeded to open one of the items. When opened and examined, a large quantity of cash amounting to over NL$343,151 was discovered concealed within the food items.

The matter was reported to the FIU in Newland and Mrs. W and the cargo, along with the cash, was taken into custody.

The FIU in Newland reported the matter to the FIU in Oldland and provided details about the seizure and the sender of the box with the monies. The sender of the box was arrested and charged by the FIU in conjunction with the Director of Public Prosecution in Oldland.

The monies were detained by the Court in Newland.


The Physical cross-border transportation of currency and bearers negotiable instrument.

Concealment of cash to avoid detection.

The use of family members or associates to transport or launder cash.