Forgery: trade-based money laundering
In this series of articles, we describe five mini cases involving false or forged invoices. In this article we focus on trade-based money laundering.
On the use of false and forged* invoices: we often encounter them in our analyses of unusual transactions. Forgery is a crime in itself and can additionally be used to facilitate money laundering. That is why it is subject to reporting obligations.
Trade-based money laundering is a form of money laundering that uses (international) structures to mix illegal cash flows with legal trade flows. Thorough analysis of the flow of money and goods within the companies concerned helps to gain more insight into these structures.
One example is the trade in bulk goods, where the invoices for certain shipments differ from the weighing documents for those shipments. Or a discrepancy between the delivery agreement, the invoice and the consignment note (CMR) of a delivery of goods. This can be an indication of over- or under-invoicing which criminals use to settle sums of criminal money between each other.
Combining information and data sources
Such complex structures are difficult for individual gatekeepers to recognise. At FIU-the Netherlands, we analyse these types of phenomena by combining information from different gatekeepers and data sources. Ultimately, a seemingly minor falsification can be a valuable addition to a criminal investigation.
False and forged invoices can be used to earn money illegally. For example, with invoice fraud, criminals send false invoices in the hope that they will be paid by consumers or businesses.
However, criminals may also need false and forged invoices to launder illegally earned money or to account for it in their records.