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Money Laundering Red Flags

In: Business and Management

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MONEY LAUNDERING RED FLAGS
WIRE TRANSFERS

This document lists various transactions and activities that may indicate potential money laundering. While not all-inclusive, the list does reflect ways that launderers have been known to operate. Transactions or activities listed here may not necessarily be indicative of money laundering if they are consistent with a customer’s legitimate business. Also, many of the “red flags” involve more than one type of transaction.

1. Wire transfer to bank secrecy haven countries. Transfers to well known “secrecy havens.” 2. Incoming/Outgoing wire transfers with instructions to pay upon proper identification. The instructions to the receiving bank are to “pay upon proper identification.” If paid for in cash, the amount may be just under $10,000 so no Currency Transaction Report is required. The purchase may be made with numerous official checks or other monetary instruments. The amount of the transfer may be large, or the funds may be sent to a foreign country. 3. Outgoing wire transfers requested by non-account holders. If paid in cash, the amount may be just under $10,000 to avoid a Currency Transaction Report. Alternatively, the transfer may be paid with several official checks or other monetary instruments. The funds may be directed to a foreign country. 4. Frequent wire transfers with no apparent business reason. A customer’s frequent wire transfer activity is not justified by the nature of their business. 5. High volume of wire transfers with low account balances. The customer requests a high volume of incoming and outgoing wire transfers but maintains low or overdrawn account balances. 6. Incoming and outgoing wires in similar dollar amounts. There is a pattern of wire transfers of similar amounts both in and out of the customer’s account, or related customers, on the same day or next day. The customer may receive many

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