ML Terms and Concepts News

Money Laundering 101: The Complicit Employee

Welcome to Technical Post # 7: The Complicit Employee. This is one of a money launderer’s better tools. From the planted to the duped to the turned – they come in all shapes and sizes. But in the end, they all enable the launderer to bypass an institution’s safeguards or policies.

The most common is likely the duped employee – often someone on the front line – a teller, a clerk… The launderer might smooze the employees of a branch – always nice, always considerate, maybe even provides small holiday treats for the branch as a whole – a fruit basket, a tin of cookies… He will ingratiate himself with the staff so when he asks for a “little favor,” he’ll already have targeted the employee most likely to turn a blind eye. “After all, he is one of our nicest customers.”

Not as effective, but he may even try the brow-beating method – demanding everything until some employees will do whatever it takes to get him in and out of the branch.

A healthy degree of cynicism in a manager can be key here. They don’t need to see “shadows at midnight,” but never fully forgetting the dangers of a money launderer or terrorist financier can go a long way.

Then we have the plant – someone on board with the launderer right from the start. This person will become the launderer’s eyes and ears – telling him about the institution’s policies and practices. Or even the hands, accepting large transactions and later breaking them down to avoid reporting requirements. Good pre-employment screening can help here.

And lastly, the turned. Be it though disenfranchisement, enchantment or threat, this is an established employee that the launderer is able to make an ally, or conquest, of.

However it happens, once the launderer has a complicit employee in his pocket, he will take full advantage of the situation, pushing more and more money through the institution, knowing that he has an insider who will strive to keep the transactions off the radar. So it becomes quite obvious how valuable the complicit employee is to the launderer.

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