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What are the common signs of money laundering?

On Behalf of | Jan 27, 2025 | Felonies, White-Collar Crime

As a business owner, you work hard to follow the rules and run an honest operation. But despite your best efforts, you might unknowingly find yourself dealing with people who try to use your business to hide illegal money. Oversight may cost you your business and reputation.

Knowing the warning signs of money laundering can help protect you from getting caught up in someone else’s criminal activities.

Insistent cash payments

Pay attention to how your client wants to pay. If they always want to pay in cash or make several cash deposits that stay just under $10,000, your internal alarms should ring.

Take note, banks must report deposits over $10,000 to the government. That’s why people trying to hide illegal money often make smaller deposits to bypass federal reporting requirements and avoid detection.

Mysterious multiple accounts

Be careful of business partners who keep many bank accounts without a clear reason. Having accounts at different banks, especially in other countries, is often a red flag. It might mean they are trying to hide where their money comes from using complex transactions.

Shell company involvement

Be wary of transactions involving several companies, as well. If a business has no office, no employees and no actual work happening, it might be a front. These fake companies often help move dirty money through legal businesses like yours.

Strange international transfers

Stay alert when you see regular wire transfers to high-risk countries—especially if they don’t make sense for the type of business. If your business partner regularly sends or receives money from overseas without clear reasons, this could spell trouble.

Inconsistent business records

Look for these red flags in their documentation:

  • Missing financial records
  • Confusing money trail or source of funds
  • Strange bookkeeping methods

These discrepancies are often attempts to hide money laundering activities.

Protect yourself and your business

Ignorance of money laundering activities and other white-collar felony crimes may not always protect you in court. If you notice any warning signs or have doubts about a contract or transaction, it’s safer to consult an experienced legal professional. Prompt action can help protect your interests and demonstrate your commitment to legal compliance.

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