Cars, jets, casinos, mansions: 4 red flags for money laundering

By Christine Duhaime | November 5th, 2019
Private jet trip advertised for whopping US$80k one way!

Lots is often written about red flags within a sector to spot money laundering but not much is written about cross-sectoral red flags that can help investigators identify potential money laundering, where the combination of factors in different sectors may increase the probability of the incidence of money laundering. These red flags are about image – they speak to typologies consistent with a need for the overt demonstration of wealth. The following are four quick red flags that together, may indicate money laundering:

  1. A person enters a Vancouver casino with wads of cash and gambles with it, not concerned about losses and often with one or two colleagues who equally have wads of cash, especially coupled with evidence that the person has no employment income going through their bank account, or they may have consistent employment income but the amounts they are gambling at a casino exceed their reported employment income.
  2. A person appears on private jet manifests for international travel, usually with others, and like the casino activity, that person has no reported employment income consistent with the ability to pay for private jet trips internationally. We once worked on an investigation for a file and obtained flight manifests for a specific purpose but it helped provide evidence for a different purpose altogether which we wouldn’t have had otherwise, so don’t discount the value of researching whether a person hired private jets to travel and more importantly, who flew with them.
  3. A person rents or leases expensive fast cars, often paying for the car rentals in cash and as above, there is no reported income to support the ability to fund expensive luxury vehicles.
  4. A person moves into a multi-bedroom mansion and there is no reported income to support the expense.

As you build your case as an investigator, depending upon the type of investigation, obtaining PZT footage of the person gambling with records of how much they and the people they were with brought into the casino is a first step.

Depending upon your agency, private jet manifests are also straight forward and fast to obtain. The manifests are important because they tell you who the person does business with closely, which may lead to being able to trace money between those parties. Private jet agencies make their prices available for the public so once you have manifests, you can tell how much they paid for private jet trips.

There are not that many exotic car rental and lease agencies in most cities and so this is fairly straightforward, especially if you have already obtained car plates to identify the car model and make when you appear at the rental agency to seek records. Keep in mind that those who rent private jets aren’t likely to hail a cab when they land at their destination; rather they are likely to have rented an expensive exotic car at the airport so that their image of wealth is maintained.

Housing is more difficult to obtain information, especially if the housing is rented but not impossible because usually the home owner is the direct landlord and they can provide copies of rental agreements.

The final step is assessing the luxury lifestyle spending of the person versus their employment income. Even at a rudimentary level, the salaries of most positions are publicly known and do not vary to a large degree and so investigators can tally up the monthly spend on cars, jets, casinos and mansions and see if it corresponds with employment income. If they are not consistent, then there may be red flags for potential money laundering.

Also check for a criminal record in jurisdictions where the person studied or previously had a job. If the person has a criminal record, the risks are more elevated, and if they have been de-risked by a bank, it means that a financial crime team formed an assessment that they were high risk for financial crime.

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