How do I Recognize Money Laundering Scams?

Money laundering scams usually involve situations where a person receives a request to act as an intermediary for transactions of cash or goods. Almost all situations of this nature are fraudulent, especially if the request comes from an unknown person. People caught up in money laundering scams should be aware that they can be criminally liable for receiving stolen goods or funds, and may face severe penalties. To avoid such situations, people should be careful about business transactions and remember the adage that if something sounds too good to be true, it probably is.

In a typical money laundering scam setup, the perpetrator approaches the victim to ask her to receive money or goods and move it to another location. This should raise a red flag, even if the perpetrator has a good excuse for not being able to handle them directly. The perpetrator also usually tells the victim he can keep some of the money or goods as “compensation,” another red flag warning. Companies that do need people to act as agents for transactions usually go through official agencies and third party shippers, rather than approaching random strangers.

In money laundering scams, people do things like purchasing goods with stolen credit cards, shipping them to the victim, and having the victim repackage the goods for legitimate resale. Another tactic involves moving stolen funds through innocent bank accounts; the victim receives a check, wire transfer, or money order, deposits it, and then transfers funds to another person. The goal of money laundering scams is to hide illegal transactions in a layer of seemingly legitimate ones.

Anyone who receives a random contact asking for assistance with moving money or goods should be suspicious. In money laundering scams, the perpetrator will ask the victim for personal shipping and bank account information, another warning sign. Victims will also be told they do not need to declare that activity on their taxes. In a classic example, the victim receives an email from someone claiming to be a foreign national, explaining that he is having trouble with payments for his business and wants the victim to handle payments on his behalf. If the victim agrees, she will receive periodic deposits and get directions about where to forward the money.

Most money laundering scams are obvious in their nature. Perpetrators rely on greed with enticements like allowing people to keep some of the goods or funds they handle, or exploit poor education in the hopes that a potential victim will not recognize the warning signs. If someone is approached by a person who asks her to handle goods or funds on his behalf, she should contact law enforcement authorities to report the situation.