How do I Recognize Money Laundering Scams?

Mary McMahon
Mary McMahon

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.

Money laundering scams usually involve situations where a person receives a request to act as an intermediary for transactions of cash or goods.
Money laundering scams usually involve situations where a person receives a request to act as an intermediary for transactions of cash or goods.

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.

The goal of money laundering scams is to hide illegal transactions in a layer of seemingly legitimate ones.
The goal of money laundering scams is to hide illegal transactions in a layer of seemingly legitimate ones.

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.

Some banks no longer accept money orders due to the potential for abuse.
Some banks no longer accept money orders due to the potential for abuse.
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Discussion Comments

anon249602

I've been offered job by cash one finance, after they declined to give me a loan. The only thing is they want me to be is a collections agent and use my bank account! I am currently unemployed and the work pays! So just for this reason I have agreed. But something does not feel 100 percent. Is it a scam, I wonder?

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