How to Spot the Signs of Money Laundering and Protect Your Business

What is Money Laundering and Terrorist Financing? 

I’m sure we’ve all heard the term ‘Money Laundering’ and what it means on the surface, but for those new to the subject, let’s take a quick look at what this means in the real world.  

Money laundering is the process of making criminal proceeds appear legitimate. It could be stolen cash, goods, or money from other crimes. Stealing isn’t money laundering but trying to hide the proceeds from it is, and by ‘hiding’ we don’t mean storing cash behind the sofa, or under a mattress.

Money laundering is turning the proceeds of crime into apparently 'innocent' funds with no obvious link to their criminal origins.

You may have heard the term ‘Terrorist Financing’, this is the use of proceeds of crime to facilitate the financial support of terrorists.  

Examples of Money Laundering 

Let’s test your knowledge. Angela is the accountant for a small company that runs tanning salons. She receives cash from a gang that specialises in Post Office robberies. She pays this into the bank, a little each week, as takings from the salon. Is this money laundering?  

If you answered yes, you’d be correct, this is an example of money laundering. Angela is trying to conceal the proceeds of crime by hiding the stolen funds amongst the tanning salon takings. 

Let’s try one more. Joe lives on his wits. He does a bit of drug dealing with his mates and has spent time in prison for theft from pub-goers on a Friday night.  

When he has money, he spends it. He’s bought an old car for cash and likes to show off his bulging wallet when he gets the chance. Is Joe involved in money laundering? If you answered no, you’d be correct, this is not an example of money laundering. Joe is committing crimes, but he isn’t money laundering. He’s not concealing the drug money. He’s spending it. 

This is where stereotypes need to be forgotten. Money laundering can happen anywhere and by anyone.  

Further examples of money laundering:

• • Smuggling
  • Modern Slavery
  • Human Trafficking
  • Corruption
  • Theft

The National Crime Agency Needs You! 

“So, why do I need to bother about money laundering? That’s never going to happen to me or my organisation” I hear you cry.  

The risk of unintentionally facilitating money laundering or terrorist financing is present for all financial professionals. 

Criminals rely on money laundering to profit from crimes such as weapons, drugs and even human trafficking. Whilst this list sounds 100 miles from you and your organisation, that couldn’t be further from the truth.  

You should never be complacent about these types of criminals. Money launderers could be your clients or colleagues. If you have a stereotype of a money launderer in your head, remove It now.  

If you find yourself involved in money laundering the consequences are extremely damaging. You could be imprisoned for up to 14 years and/or an unlimited fine. 

Maybe turning a blind eye seems like the easy way out? Wrong. Failure to report offences under the Proceeds of Crime Act (POCA) could see a maximum conviction of five years imprisonment.  

How do I Spot the Signs of Money Laundering? 

The offence of money laundering is separate from the original crime and may involve different people.  

Recognising signs of money laundering can be a real challenge. However, there are some indicators to help you spot the signs of money laundering; these could be:  

• • Avoiding face-to-face relationships, interactions, or transactions 
  • Unnecessary secrecy and/or evasiveness 
  • Alternative process is requested instead of the customary way of doing things 
  • Things need to be done at breakneck speed 
  • Disinterest in the end product 
  • Operating in high-risk countries 
  • Involvement of an agent or a middleman 
  • Inconsistencies between the socioeconomic profile of the individuals involved and the amount of private funding or cash available 

In simple terms, transactions that just don’t make good sense should send the alarm bells ringing.  

The list above is not exhaustive, but things that could raise a red flag. 

Anti-Money Laundering Training is essential 

Money laundering isn’t going away, and all financial services professionals must play their part in prevention to protect themselves and their businesses. 

Credible, up to date training is essential. 

In Access  Learning, as part of our Financial Services  catalogue, we have created an immersive eLearning module specifically for Anti-Money Laundering that highlights:  

• • How to spot the signs of money laundering 
  • How to prevent money laundering 
  • How to report money laundering and suspicions of terrorist financing 

For non-financial services firms we also have the course in our Compliance and Corporate Social responsibility course catalogue.

Emma Papapesiou, Lead Learning Designer for the Anti-Money Laundering and Countering Terrorist Financing course explains the approach this course takes: 

"We wanted to rip up the rule book and produce a piece of digital training on Money Laundering that was engaging, informative, mobile-friendly and with micro-learning at the heart of what we do.  

We brought this learning to life by interviewing a convicted Money Launderer. It is a truly gripping story to tell, and the fact it was being heard first-hand made it even more incredible.   

As great as this story was, we still felt we had scope to make this learning module even more immersive. We let the user become the money laundering in the form of a branching scenario. This means that the user has choices to make along the way to control the outcome of their decisions.”