Anti-money laundering mistakes

The main character of Netflix’s hit show, Ozark, is a quick-talking financial advisor named Marty Byrde. Though Marty appears to be a trustworthy family man, he runs a major money laundering operation in Ozark, Missouri. The series chronicles him swindling unwitting business people into using their storefronts to launder huge sums of drug money.

Now, when watching the show, business owners might think to themselves, “That could never happen to me! Marty Byrde’s money laundering schemes seem so obvious.” However, the sad truth is that any business’ customers or clients could be a money launderer in disguise, aka a Marty Byrde; and if you’re not vigilant, you’re putting yourself and your business at risk. Symptai Consulting Limited warns businesses against becoming complacent or of being just plain ignorant of the very real risks money launderers pose, especially to small and cash-intensive businesses.

Here are some of the most common mistakes you could be making that could lead to your business becoming the victim of money laundering ploys:

You don’t ask thorough and specific questions

Whenever you are approached with a business proposition, test its money laundering potential by employing a three-step approach to ensure it’s a legitimate partnership. Step 1: Ask about the amount of money and other investors involved; obscure answers are a red flag. Step 2: Ask why the entity or person is seeking to invest. Step 3: Ask thorough questions about assets that appear in any financial documents they share with you. Depending on your industry, an easy way to get these thorough answers is to employ the know your customer (KYC) strategies or a full anti-money laundering (AML) framework. KYC and AML methods employ various verification, monitoring, and cross-checking procedures. These need to be airtight to prevent malicious individuals from slipping through your security net. Having thorough procedures might even help your case in the event of charges.

You don’t know much about money laundering schemes

If Ozark has taught us anything it’s that money launderers are constantly developing new tactics. Money laundering puts your company at risk, including your income, assets and employees. It is usually tied to criminal activity and some form of violence to support it. Possible criminal charges and reputational damage could destroy your business. Money launderers can put illegal cash in your account, layer proceeds through wire transfers, convert cash to financial instruments, and make funds from illegal activities look legitimate by falsifying invoices or overbilling. You may want to avoid accepting prepaid credit cards as these are also something typically used for these schemes.

You ignore due diligence

Don’t be afraid to dive deeper into the backgrounds of potential clients/partners. If you find yourself unsatisfied with the responses they’ve provided, do your own research into their identities and claims. Is their company registered with the local trading standards authority or a government office? This is particularly important if foreign countries are involved. Seek assistance from law enforcement if something seems suspicious. In Jamaica, the Major Organised Crime & Anti-Corruption Agency (MOCA) arm of the Ministry of National Security is well equipped to aid in such matters.

Is your business guilty of any of these mistakes? Avoid money launderers’ schemes by staying alert and informed. Reach out to a Symptai representative today and find out about AML techniques that your company could employ and how they can help you to fight financial crime.