Professional Money Laundering

Money Laundering, in today’s world, has carved itself a niche. Professionals eye profits which this nefarious activity generates and are ever willing to scoop their shares of the loot. The art of Money Laundering has spread its tentacles far and wide. Almost every field has been infiltrated and it is as if Professional Money Laundering is gaining certain respectability in society. Until the lid of a scandal is uncovered, people hardly realise the notoriety of who they thought were honest professionals. This article gives a fleeting glance into Professional Money Laundering (PML), how PMLs facilitate Money Laundering, characteristics of PMLs and suggests some ways in which risks associated with PML can be mitigated.

Professional Money Laundering

Three years ago, a leak of 11.5 million files including financial and legal documents to reporters of a German Newspaper and later shared with International Consortium of Investigative Journalists, triggered a wave of International awareness about Tax Evasion through Money Laundering.

The impact of this leak, which later came to be known as ‘Panama Papers’, is still continuing with investigations in more than 82 countries. The founders of the Panama Law Firm and Corporate Trust Provider-Mossack Fonseca, which was at the heart of the scandal, were arrested on charges of money laundering.

The ‘Panama Papers’ drew the focus of FATF and other government and intra-government agencies to a new money laundering threat from Professional Money Launderers (PMLs).

Who are Professional Money Launderers?

According to the FATF Definition - Professional Money Launderers may be individuals, organizations and networks that are involved in third-party laundering for a fee or commission. PMLs may act in a professional capacity (e.g. Lawyers, Accountants). They provide expertise to disguise the nature, source, location, ownership, control, origin and destination of funds to avoid detection.

Professional Money Launderers (PMLs) can belong to 3 categories:

1. An Individual PML – He or She specialises in the provision of ML services while engaged in a legitimate professional occupation. The services which the individual PMLs provide can include accounting services, financial or legal advice and the formation of shell companies and legal arrangements.

2. A Professional Money Laundering Organization (PMLO) –consists of two or more individuals acting as a group facilitate in providing services or advice to launder money for criminals or other OCGs (organized Crime Group). Laundering funds may be the core activity of these entities, but it is not necessarily their only activity.

3. A Professional Money Laundering Network (PMLN) – This is a larger network of associates or contacts working together to facilitate PML schemes & provide services for specific tasks. They operate globally and work with many criminal clients, providing them a range of ML services such as opening foreign bank accounts, establishing or buying foreign companies using laundered money.

How do PMLs facilitate money laundering?