Monday, July 27, 2020
Money Laundering Threat Via Private Investment Funds To Launder Illicit Proceeds, Circumventing Regulatory Tripwires
An FBI leaked document (declassified and available here) reports examples of the Money Laundering Threat Via Private Investment Funds To Launder Illicit Proceeds, Circumventing Regulatory Tripwires
- As of April 2019, an identified former partner of a major US law firm assisted others in laundering more than $400 million from a fraudulent cryptocurrency investment scheme
through a series of purported private equity funds holding accounts at financial institutions, including those in the Cayman Islands and the Republic of Ireland, to conceal and disguise the nature, location, source, ownership, and control of the proceeds. The underlying source of funds, the perpetrator of the cryptocurrency scheme, was not disclosed to the bank during the initial due diligence review, according to open-source reporting, and a human source with direct access.
- As of July 2019, a representative of a New York, New York, and London, United Kingdom-based hedge fund proposed investing in private placement funds and using a series of shell corporations to purchase and sell prohibited items from sanctioned countries to the United States. The proposed hedge fund was to have operated entities registered in Luxembourg and Guernsey to evade regulatory requirements when transacting with sanctioned companies, according to a human source with direct access.
- As of January 2019, an unidentified Mexican cartel operating in the Los Angeles, California, and Orange County, California, areas recruited and paid individuals to open hedge fund accounts at private banking institutions. The cartel laundered approximately $1 million through the accounts each week and then withdrew the money to purchase gold, according to a human source with direct access whose reporting has not been corroborated.
- As of August 2017, a New York-based private equity firm received more than $100 million in wire transfers from an identified Russia-based company allegedly
associated with Russian organized crime, according to a reliable source with excellent access.