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Signs of money laundering from our fraud solicitor
15 May 2023

It seems simple in theory; you set up a business, oversee the accounts, and put your most trusted member of staff in charge of the finances. However, as many business owners have learned the hard way, this can be a recipe for money laundering or other illegal activity. And if money laundering is found in your company, it will be linked to you.

Of course, there is help available. At ABV Solicitors, our fraud solicitor is always happy to meet with business owners who want to prevent money laundering, as well as to advise them if they have been accused of such activities by HMRC.

But, how do you spot money laundering? Here are some signs of it to keep an eye out for from our fraud solicitor.

Unusual Transactions

Transactions that are unusual in their size, frequency, or nature, such as large amounts of cash deposits, payments from unrelated third parties, or wire transfers to high-risk countries like Africa, may be a sign of money laundering. If you see this in your own business, you will need to report it promptly and seek the advice of our fraud solicitor.

Lack of Business Purpose

Transactions that lack an apparent business purpose or are inconsistent with the known customer’s business may be a sign of money laundering. For example, a customer who frequently buys expensive jewellery but has no known source of income may be suspicious. However, if a similar activity is spotted with a business partner, such as the excessive moving of large funds with no purpose, then you should alert the authorities, as not doing so may make you appear guilty by default.

Attempt to Avoid Reporting Requirements

If you have business partners or customers who attempt to avoid reporting requirements, such as by making several small deposits instead of one large one, this can be a sign of trying to conceal their activities. Of course, this is not always the case and can be common if you run an online business and offer a breakdown of payments for items or services. However, it is something to be more aware of when it comes to business partners and should always be investigated.

Unusual Behaviour

Customers, business partners, or even members of your own staff who exhibit unusual behaviour, such as a lack of concern for the fees associated with financial transactions, a reluctance to provide information, or a desire for secrecy, may be trying to conceal their activities. Always make sure you investigate any incidents of this with business partners as, if their company gets investigated for fraud, you may be as well. Also, when it comes to staff, this is your responsibility to check, so always aim for absolute clarity within your business and your accounts.

Lack of Transparency

Customers who refuse to provide information about the purpose of a transaction or the source of funds may be engaging in money laundering. In a similar vein, if your staff are shielding information, or you have a business partner who is also being secretive, it is best to investigate such instances. If a customer’s activities are not transparent or do not match their stated business, it could be a red flag for illegal activities.

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