AML/CFT policy – less obvious cases of companies used for money launderin

However, it is not the case that only typical obliged institutions such as the aforementioned banks, or casinos, investment funds or insurance agents, which also come to mind at first, are at risk of money laundering.

What if our activity is not classified under the IO directory so that we are not obliged to implement AML policies, but suspicious transactions indicating money laundering are detected?

In such cases, it is worth considering filing a criminal report. This can protect company managers from being charged as accomplices or accessories to money laundering, which can carry up to 25 years’ imprisonment in extreme cases.

What are some non-obvious examples of companies used for money laundering?

• Video game platforms

A study published by Forensic Science International: Digital Investigation indicates that money laundering (and other crimes) may be taking place via an auction portal linked to one of the most popular gaming platforms. The analysis tracked a number of auctions related to the purchase and sale of virtual game items.

A dozen or so extremely active users came under the scrutiny of the analysts – the record holder made almost 7 000 transactions for the purchase of virtual items over a period of 5 days. These same over-active users were essentially duplicating their transactions, which may indicate an existing network.

Other suspicious activities within the video game community include the release of archaic, low-budget titles, with short play times, and which are listed by the developers on auction platforms for absurd amounts relative to what they offer. Some titles are priced at almost… £9,000 for less than two hours of entertainment.

• Car dealerships and showrooms

Dealerships are still in demand, but are no longer as popular as they were in the 1990s. Authorised car dealerships have also seen declines in sales. Nevertheless, the high availability of “off-the-shelf” goods in the form of expensive cars and the possibility of paying cash favours the use of car dealers in criminal activities.

Many people do not realise that it is car dealers and authorised dealerships, although not literally listed in the catalogue of IOs, that may be obliged to have an AML procedure. One type of IO is traders who purchase or sell goods by settling in cash. The condition is that the total turnover must amount to no less than €10,000 (or the PLN equivalent, currently around PLN 43,000). In the case of the car trade, such amounts are an everyday occurrence.

Not long ago, the media reported on increased GIIF inspections precisely in the car trade. The inspectors demanded, among other things, statements of cash payments, data of depositors and access to other documentation related to the implementation and application of the AML policy.

• Restaurants and catering

Everyone expects food ordered for takeaway or on the premises to be prepared in hygienic, even sterile conditions. In this case, cleanliness also has a secondary meaning: criminals have seen the HORECA industry as a way of laundering the proceeds of crime.

This is despite the fact that restaurants or diet catering establishments are not listed as HORECAs in the directory, unless there are specific conditions (e.g. purchase of goods for less than the equivalent of €10,000 in cash). However, this does not mean that such entities are not exploited by criminals.

On the contrary, in recent years, information about money laundering straight out of the previous gangster era has been increasingly leaked to the media. Criminal groups from Ireland, Mexican cartels and the Chinese Triad are increasingly using the restaurants they run as a facade for their criminal activities. However, investigators looking at the case ‘behind the scenes’ have no doubt that the big shots are covering up the criminal origin of the cash in this way.

In the age of progressive online ordering and the growth of personal catering, money laundering does not escape diet companies either. There are cases where criminals take advantage of fully legitimate catering companies. In the practice of the law firm, there have been cases where, through the manipulation of orders, criminals have concealed dirty money via a client’s wallet in the ordering service. After a certain period of time, they made demands for the funds to be returned to the designated bank accounts.

• Football clubs

For years, football has been plagued by various smaller and larger criminal-image problems. Corruption present even at the highest levels, crimes committed by pseudo-fans during matches or the influence of organised crime groups on club activities are just some of them. Unfortunately, in the realm of anti-money laundering, the football community is not flawless either – estimates put money laundering at $140 billion a year.

The seriousness of the problem was already reported by the Financial Action Task Force in 2009 in a report specifically on the football environment[1]. There has been a variety of money laundering activities over the years. In France, for example, there have been investments of large amounts of money in amateur football clubs. In neighbouring Belgium, on the other hand, a practice involving money being invested in failing teams by a number of tax haven companies was detected.

A little further afield, in Mexico, dirty money was also being invested in a football team from a small town. The generosity of the new sponsor caught the attention of the authorities – all the players’ contracts, but also those of the club’s employees, were well above league standards. It eventually came to light that the head of an organised crime group involved in drug production and smuggling was behind the ‘investment’.

Money laundering in football is not just the domain of well-organised criminal groups. Examples include allegations against individuals such as top FIFA officials (the 2015 FIFA Gate scandal), the former agent of the popular Zinedine Zidane, and the head of Brazil’s football association.

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[1] FATF Report: Money Laundering through the Football Sector July 2009, https://www.fatf-gafi.org/content/dam/fatf- gafi/reports/ML%20through%20the%20Football%20Sector.pdf.coredownload.pdf

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