How Money Laundering Techniques Have Evolved till 2024

Have you ever wondered how criminals stay ahead of the law? It’s time to critically examine how money laundering techniques remain ahead of the time.

Money laundering is not merely a phrase for Financial regulatory bodies and law-imposing authorities; it’s also a hot topic in the film industry. Writers and directors are interested in showcasing their thoughts using a cinematic approach and showing reality through movies.

Grab a chair, hold a cup of tea, and imagine a mysterious movie where thieves are brainy and skilled in implementing their ways using advanced techniques.

Assume this scene has a low pixelated cinematic quality and shows the robbers’ planning with outdated technologies. Your interest is gone, and you have a frown and bitter words in your mouth. What a dull and failed plot it is.

Money laundering works the same way. They level up their game by acquiring skills and being thoughtfully smart in their techniques to deceive others.

“Living in London, you feel the sense of how it has developed into a service city.  People come here from around the world to launder both their money and their reputation.”

James Watkins

Let’s take a historical ride through money laundering techniques in the natural and cinematic world to explore upgraded strategies and regulations of money laundering in this article.

We will explore each era’s historical, famous events and terrible frauds, showing that fiction and reality are connected.

An international crime gang laundered millions in drug money, following the trail from the streets of London to the gold markets of Dubai. Watch how the investigation revealed a complicated web of connectivity involved.

Top 4 Ancient Techniques in Money Laundering

Here’s a review of the top four ancient techniques used in old times by fraudsters. Be ready for an exciting journey of money laundering with a cinematic approach through my lens.

• Structuring (Smurfing)

Breaking down large amounts of money into smaller payments is called smurfing or structuring to dodge detection by the authorities. This technique was famous among money launderers in the 1980s.

Criminals split large sums of money into low, insignificant deposits into different bank accounts during the structuring process, which is an unnoticeable amount in the eyes of regulatory bodies.

Antonio “Tony” Montana is a fictional character who plays a rival in the 1983 movie Scarface. Smurfing was depicted in the movie by Tony’s planning to distribute millions of dollars in drug money into little funds in several bank accounts.

Every submitted amount is like a piece of the puzzle that joins together to make a financial web that unusually passes the detection. Each dealing of Tony’s business is risky and intelligent as it conceals its dirty money.

• Shell Companies

Let me take you into the shady world of shell companies, organizations that only exist on paper and have no reality behind them. These institutions don’t have actual employees or locations to work and only are front faces for transferring dirty money.

Shell companies conceal dirty money by hiding illicit money’s actual ownership and origin. Suppose a clever villain in a film uses multiple fake identities by masking his real identity to bypass being caught to fulfill his filthy aim

The Godfather (1972), a film by Hollywood, depicts the reality of shell companies through its storyline by showing the powerful, famous, and clever Coleone family who set up respectable companies and run them smoothly to make them legitimate.

Imagine that the whole business comprises multiple companies, from construction companies to the transfer of olive oil, which is a fake illusion to mask the reality of their criminal actions. Investigators find it hard to detect because of their dealing, which creates more creativity by layering the transactions.

• Offshore accounts

Money launderers transfer their illicit money to foreign banks to hide from domestic authorities.

In 1995, a Casino movie with a spectacular storyline was released.

Have you ever wondered how the money laundering through a casino works? A specific portion is removed from the top before entering the record and sent to the mob bosses. Shady, huh?

Layering would make it more difficult for the authorities to locate the funds and return them to their suspicious sources.

Once black money enters the financial system of crime, it’s easy to transfer the money to bank accounts or invest it somewhere else for another purpose.

In the film Casino, we can see the implementation of this technique as the mafia uses offshore bank accounts in places like Switzerland and the Cayman Islands to conceal illicit money.

Have you ever considered how deep corruption may go?

• Trade Based Laundering

Consider a scenario in which villains transport high-valued goods worldwide. But there is a catch!

Instead of real, authentic goods, they transfer illicit money. Isn’t it art to conceal money in daily transactions without getting caught?

Criminals use over-invoicing or under-invoicing methods to conceal the actual amount. They sell something but hide its profit, or they write on documentation that they sell with profit but lie, and sometimes, they ship nothing but paperwork that says the opposite.

AML/CFT regulations and strategies aim to prevent and combat these organized crimes, which is important for ensuring the authenticity and sustainability of the financial markets and the worldwide economy.

Next time you hear about a shipment of highly valued goods, you might be curious to know is it genuine, or is there something fishy behind it? Red flags can help you find out.

Top 4 Modern Techniques in Money Laundering

Traditional money laundering methods might amuse till date but don’t work as effectively anymore, as the government and financial authorities have learned to protect their systems.

Modern tactics are the new inspiration for criminals.

• Cryptocurrency

The emergence of cryptocurrency has widened the opportunities to conceal illicit money in mysterious ways.

Why does this digital currency attract criminals? It’s more quick, provides security, and is easily convertible. Everything is just a click away.

Law enforcement experiences difficulty catching up on these transactions because of the involvement of the dark web. The cinematic representation Dope film (2015) is fascinating as it displays how technology has evolved and creates ease for criminals.

• Online Gambling

Money laundering through online gambling sites is a popular method among criminals to conceal their illicit money and make it look like legitimate funds by gambling winnings.

The question arises, where do they receive illegal money from?

Criminals initiate their procedure by depositing money into an online gambling account. Next, they offer bets.

Can you predict the games they choose? They mostly choose games where they have the authority to control their results or where the risk is less.

After a few bets, they withdraw their funds, and you would be surprised to know why it looks authentic because the cash looks like gains from winning the gambling, making it challenging to determine its illegal source.

Molly’s Game (2017) is a perfect example of this technique, where a high amount of wealth is produced and lost in the blink of an eye.

A lot of money is exchanged in these games, making it difficult to differentiate between legal and illegal transactions.

• Real Estate Investments

Real Estate investments facilitate stages of money laundering by purchasing properties with dirty money and selling them further to conceal the illicit money and make it legitimate. This method is more complicated as it is challenging to identify the actual origin.

Criminals purchase homes either personally or through complex transactions to mask the source.

Selling these properties to others or gaining income from rent facilitates it, and that’s how it becomes legitimate.

The Wolf of Wall Street (2013) depicts the money-laundering process through a scene where Belfort bought a mansion with illegal money, highlighting how high-value goods and buildings conceal illegal money and raising the need for strict regulation to overcome the severe issue.

• Cybercrime innovation

Cybercriminals mask their illicit money and remain unrecognized by using complex methods. Mixing services, such as Tumblrs, and breaking cryptocurrency transactions into smaller amounts increase the difficulty of detection.

VPNs and the TOR network facilitate criminals in money laundering by masking their online activity and location, making it challenging for regulatory bodies to track them.

Another tactic of cybercrime is making false identities online. Criminals mix real and fake information using online systems, open bank accounts, get credit cards, and make other deposits and transfers of funds.

Have you ever wondered whether the person you’re dealing with is real or masked by fake identity?

This technique took me back to the identity scam in the film Catch Me If You Can. These methods show the intelligence and brilliance of cybercriminals but there has to be ways to counter modern tactics.

Financial organizations can fight money laundering by AML programs like AML Watcher, which provides services to safeguard against terrorism financing and identity theft. Our rapidly expanding software AML Watcher delivers a vast platform to make it easier for you to comply with AML guidelines.

In the face of changing anti-money laundering legislation, AML Watcher provides services for upgrading and accurately sanctioned information about strengthening your AML compliance using the latest AML techniques.

Utilizing the efficient services of AML Watcher, like Customer risk assessment, biometric screenings, continuous monitoring, and customized risk scoring, you can make your compliance program robust and precise.

We provide access to over 60,000 watchlists, PEP checks, sanction lists, and worldwide leak sources. With AML Watcher’s enormous database, you can check profiles worldwide to identify a company’s genuine ownership and authenticity and prevent yourself from possible hazards.

Do you want to know more about our AML solutions related to AML sanction screening? Contact us to learn how we can help you carefully examine each questionable profile before making any deal with your company or system.