Typology or rumour mongering?

Many of the stories I pick up on relating to financial crime or alleged laundries, frauds and criminal enterprises are from across the web. Published by local newspapers or unearthed by bloggers, I have no real idea of judging the reliability of the information. I don’t know how much research the journalist has done, nor to which political agenda – if any – the publication adheres.

Regulated entities are advised and encouraged to look for adverse media reports to build ‘know your client’ profiles and to use typologies as the basis for red flag identification. This media report from the Czech Republic describes how a Vietnamese market in Prague is a suspected drug trafficking and money laundering hub, with the usual links to organised crime and tax evasion. All the right buzzwords are used and according to the report the case was discussed in parliament. It also mentions the underlying tensions between the Czech residents and the Vietnamese workers. While there may be some suspicion around tax evasion and criminality in the area, the parliamentary lobby could be motivated by another hidden agenda.

Placing trust in media reports that highlight alleged typologies or give information about individuals – whether positive or adverse – could create a misrepresentation of a client. To this end, adverse media reports are also used to collate information used by name databases and ultimately provide a report on an individual. When the compliance officer downloads the report, his or her own judgement must come into play at the point of deciding the client’s risk profile.

If we look at South America, a deluge of media reports are published on alleged money laundering rings and their operators which we could accept as the truth. In Mexico, organised criminal groups have beheaded and disemboweled individuals using ‘blogs and tweets to tell the world about what’s happening in country. These selfless – or suicidal – bloggers are willing to place their lives on the line to tell the truth, but there are many established publishing enterprises that will take a different line to protect their employees, or more skeptically, protect their commercial interests.

The swiftly administered justice in Egypt, with several senior government officials arrested and found guilty of money laundering seemed like positive steps. The latest round of clashes between the people and the military government cast a different light on any the motivation behind actions taken by those in power.

The question of reliable information is one paramount when writing about ML and the individuals involved, and must be on the mind of the compliance officer who is making a judgement on the next step on a transaction. Deciphering the real typologies from the rumours is an essential part of the AML toolkit.


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