Clean on Paper

Money laundering cheat sheet

The three stages

  1. Placement. Dirty money enters the financial system. The riskiest moment, when cash first meets a record.
  2. Layering. The trail is buried under transfers, entities, conversions and borders.
  3. Integration. The money re-enters as assets with their own paper trail: property, businesses, portfolios.

One red flag per technique

A red flag is a reason to look closer, not a finding. Clusters of unrelated flags, held over months, are what move a file from routine to reviewed.

Cash

  • Bulk cash smuggling: A traveler carrying or requesting large amounts of foreign currency, or many high-denomination notes, with no plausible explanation
  • Cash-intensive front businesses: Revenue or margins far out of line with comparable businesses in the same sector and location
  • Structuring (smurfing): Repeated cash deposits just under the reporting threshold: $9,000–$9,900 amounts recurring over days or weeks

Banking

  • Abuse of charities and non-profits: An appeal for donations that cannot be tied to a registered charity, or a registered charity that stops filing accounts or answering regulator queries
  • Bearer shares, trusts and hidden owners: A company whose shares are in bearer form, or whose owners cannot be shown to the bank in any document
  • Correspondent banking and wire layering: A respondent bank whose customer base is mostly non-residents with no plausible link to the bank's home country
  • Cuckoo smurfing: Several cash deposits made into one personal account by people the account holder does not know, matching an expected overseas transfer
  • Currency exchanges and MSBs: Cash volumes, or wires abroad, that are far larger than the business's location, size, and customer base can explain
  • Funnel accounts and money mules: Inflows from many unrelated senders followed by rapid transfers out, leaving a near-zero balance
  • Insurance products: A large single premium, or a policy that is far bigger than the customer's needs or income would justify
  • Loan-back schemes: A loan from an offshore lender the borrower cannot describe, cannot meet, or cannot name the owner of
  • Professional enablers: A lawyer's or agent's client account used to receive and pay out funds with no underlying legal work, sometimes called a pass-through
  • Round-tripping and fake foreign investment: "Foreign" investment from a tiny jurisdiction far larger than that jurisdiction's own economy
  • Sanctions evasion: A transfer of a yacht, jet, or property to a spouse, child, trust, or associate near the time an owner is sanctioned, while the owner keeps using it
  • Shell companies and nominees: A registered-agent address shared by hundreds or thousands of unrelated companies

Trade

Assets

  • Art, antiques and luxury goods: A buyer who shows little interest in the work itself, its condition, or its price
  • Buying legitimate businesses: An acquisition paid for by funds from an offshore or unexplained source that the buyer cannot document
  • Gold and precious metals: Large cash payments for scrap gold or bullion from customers who cannot explain their source
  • Golden visas and investor citizenship: An applicant whose declared wealth cannot be matched to a documented, verifiable source, such as taxed income, a business sale, or an inheritance
  • Laundering through sports and football: A new owner or sponsor with no sporting or business track record who offers to pay a club's debts, often through a company in a low-tax jurisdiction
  • Real estate: All-cash purchases by shell companies, trusts, or nominees with no visible connection to the true buyer

Informal value transfer

Crypto

  • Chain hopping and cross-chain bridges: Rapid bridge or cross-chain swaps beginning minutes after a publicized hack or exploit
  • Crypto ATMs and peer-to-peer trades: Several cash deposits just under a reporting or daily kiosk limit, spread across multiple machines or multiple accounts
  • Laundering pig butchering scam proceeds: A wallet or exchange account that collects many small to mid-sized deposits from unrelated people, then forwards the balance in a few large moves within hours
  • Laundering ransomware payments: A customer in a commonly targeted sector, such as government, finance, education or health care, makes an irregular payment to an incident response firm or cyber insurer known to handle ransom payments
  • Mixers, tumblers, and CoinJoin: Deposits to or withdrawals from wallet clusters that analytics firms have tagged as mixer addresses
  • NFT wash trading: An NFT bought and resold repeatedly between wallets that were funded from the same source or from each other
  • Peel chains: A long sequence of transactions from one address to the next, each moving almost the whole balance forward and sending a small amount elsewhere
  • Privacy coins: A new exchange account funded almost entirely by a privacy coin that is then converted to bitcoin or a stablecoin and withdrawn quickly
  • Stablecoins and OTC brokers: High-volume USDT wallets, especially on Tron, with no visible business rationale
  • Unlicensed exchanges and nested services: An exchange or platform that advertises no identity checks, or accepts only a phone number or email address to open an account

Gambling

  • Casinos and gambling: Large cash buy-ins, especially in small bills, followed by little or no actual play

Digital

  • Gaming currencies and skins: Many new accounts buying the same virtual currency or items with cards issued to different names
  • Prepaid cards and gift cards: Bulk purchases of prepaid or gift cards with cash or other illicit funds, or people recruited to buy or carry cards for someone else
  • Transaction laundering: A merchant whose website sells one thing while its payment descriptors, refunds or checkout pages point to another

Securities

  • Mirror trading: Buy and sell orders in the same security, at the same time, in the same size and at the same price, placed for two related customers in different currencies
  • Securities and brokerage: Accounts held by offshore companies or nominees whose real owners cannot be identified

Clean on Paper is educational and is not legal or compliance advice. Full sourcing for every line is on the linked technique page.