Best Money Laundering Techniques – Silicon Valley Journals

Wherever or whenever people talk about cartel money laundering, one man always comes to everyone’s mind, who created the financial institutions and regulatory bodies for decades.

Yes! We are talking about the EI Chapo, who for years moved his illegally obtained money from one place to another without being noticed using various money laundering techniques. And still, after decades, the followers are EI chapo following his footsteps and laundering money using the same but advanced techniques.

Cartels are known as groups of people who obtain money through the sale of drugs and commit money laundering crimes using various techniques. Combating cartel money laundering and conducting compliance efforts against drug cartel cartels are essential measures for financial organizations. Failure to do so could result in millions of dollars in fines for the organization.

HSBC had to pay nearly $2 billion in fines for failing to implement strict AML rules against the Sinaloa Cartel and other drug traffickers, who successfully transacted to another jurisdiction without being detected. Are there specific techniques that allow companies to flag suspicious transactions as part of cartel money laundering?

Yes, many could highlight the signs of cartel money laundering. This blog discusses the various techniques that drug manufacturers, suppliers and traders use to avoid regulatory screening. Let’s discover some of the best techniques.

The best money laundering techniques drug traffickers use to avoid detection

1. Money smuggling across the border

One of the drug trafficker group’s favorite money laundering techniques involves smuggling large amounts of cash from one country to another.

It would be like the Hollywood thriller and crime series if you know that they hide the money in rooms, trucks, vegetables and other concealable things. The surprising techniques they used to move money don’t stop there; even the best film and film writers wrote their hands-on techniques into their writings.

2. Smurfs and structuring techniques

When they have to launder money through the banking channel, they try different techniques. Since drug traffickers need to move their drugs to different countries and jurisdictions, the involvement of the financial system becomes mandatory.

The supervisory authorities have set thresholds to detect suspicious transactions. Drug criminals split the large amount into smaller amounts, below the thresholds, open multiple bank accounts and make multiple small transactions to different jurisdictions to evade the detection process.

3. Establishment of Shell and offshore companies for money laundering purposes.

Do you know that there are hundreds of companies in the virtual jurisdiction that have made millions of dollars in profits without producing or delivering anything? These are the shell companies that are often set up to move illegally obtained money from their own countries to other jurisdictions.

Shell companies most likely to be established are car wash providers, retail stores and cash-intensive businesses. It makes it quite difficult for the authorities to detect these cash transactions as illegal.

4. Exploiting the global trading system

Global trading systems are vulnerable to money laundering and for drug and cartel money launderers this becomes an even easier and more sophisticated way to move money from one place to another using the global trading system.

Over- and under-billing is the most commonly used technique for moving dollars. This is what EI Chappso did by manipulating the trading system: he moved millions of dollars without actually moving anything.

This is not shorter than the magician who often performs a trick for the crown, hiding the coin in his hand and finding it in the pockets of someone sitting in the crowd.

5. Purchase of expensive properties

Real estate itself is considered the main source of laundered money investment. The recent property leaks in Dubai are proof of this statement. Where elites from different countries laundered billions of dollars in Dubai and invested in the real estate market.

So this is exactly what drug traffickers do, because they need to spend their illegal money, so they invest in real estate, luxury apartments and other expensive properties to evade the detection process.

6. Gaming and gambling

Since the world is moving towards a technologically advanced lifestyle. Money laundering techniques are also developed by money laundering cartels and drug cartels. With gaming and gambling techniques they buy a token.

Betting on online platforms and because there is uncertainty about the ownership structure on the gaming and gambling platform, they pretend that they have won millions from gambling.

How can companies stop drug cartels from money laundering?

Identifying the money laundering patterns is crucial for financial institutions’ comprehensive action against perpetrators. Therefore, companies should implement the advanced enhanced due diligence on higher-risk individuals, including the PEPs and their close associates.