Case studies Pack 2018.pdf - Case Studies on fighting Money Laundering Terrorist Financing and Economic Crime May 2018 Purpose This case studies pack

Case studies Pack 2018.pdf - Case Studies on fighting Money...

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Case Studies on fighting Money Laundering, Terrorist Financing and Economic Crime May 2018
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2 Purpose This case studies pack has been prepared by ICPAC's Compliance Committee and Economic Crime and Forensic Accounting Committee and it endeavors to provide some practical guidance to ICPAC members and students. ICPAC has identified the need to raise awareness amongst its members and students, including awareness surrounding the risks arising from the nature of activities of their client base, the nature of transactions undertaken on behalf of their clients and the business activity in general associated with an international financial service center. As there are no hard and brisk rules for recognizing money laundering, terrorist financing and economic crime, it is crucial for members and students of ICPAC to remain alert and vigilant to the Money Laundering (“ML”), Terrorist Financing (“TF”) and fraud risks by applying their professional judgement, experience and professional skepticism. The case studies demonstrate how following the money trail, identifying red flags and understanding clients’ business is an effective way of detecting the activities of fraudsters, money launderers and other organized crime networks. The case studies within this guidance paper, through analysis of the lessons that can be learned, also highlight the value and need of reporting suspicious financial transactions and suspicious activity to MOKAS. Please note that all data and scenarios provided are fictitious and have been utilized only for the purpose of illustrating, sometimes in an extreme manner, red flags which ICPAC members and student should pick up to identify suspicious activity.
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3 Case study 1 Deposits and Movement of funds between bank accounts with no business rationale Facts of the Case Company A received €2.250.000 from Company B in the form of a loan. By the next day Company A instructed the Bank to transfer the funds as follows: a) €1.180.000 in another account of Company A with another bank. b) €1.000.000 issue of a banker’s draft in favor of Company C – based on loan agreement c) €70.000 Cash withdrawal – no business explanation Following the above transactions, Company A instructed for the account to close (after 8 months from opening). Company C received €2.250.000 from Company B in the form of a loan. A month later in the accounts of Company C a banker’s draft amounting to €1.000.000 was also deposited (from Company A above) Funds were used as follows: a) cash withdrawal €1.038.000 – no business explanation b) €1.656.000 issue of a banker’s draft in favor of Company D – based on loan agreement c) €95.000 issue of a banker’s draft in favor of Company E – based on loan agreement d) €350.000 transfer to Company F – based on loan agreement e) €100.000 turned into a Fixed Deposit upon maturity of which the funds have been withdrawn in cash.
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