Investor

Individuals or entities posing as legitimate foreign investors channel illicit funds into local entities under the guise of foreign direct investment.

• They engage in high-value cross-border transfers labeled as foreign capital injections with little supporting documentation.
• Their purported investments often exceed any plausible economic rationale, complicating financial institutions' ability to verify the true source and purpose of the funds.

• Unwittingly provides capital in hopes of high or guaranteed returns.
• Receives initial "returns" or testimonials designed to reinforce trust and encourage further investment.
• Ultimately suffers financial losses, with deposits fueling the fraudsters' laundering cycle.

Unwitting investors may inject legitimate capital into multi-jurisdictional corporate networks by:

• Funding ventures without realizing the underlying structures are designed to launder illicit proceeds.
• Adding a layer of apparent legitimacy that mixes illicit funds with genuine investments.

This complicates asset tracing and investigations for financial institutions.

Investors, often unaware of the fraud, supply fresh capital that is:

• Commingled with illicit proceeds to pay 'returns' to earlier participants.
• Used by the operators to maintain the illusion of profitability and continued growth.

Their deposits, reinvestments, and referrals inadvertently obscure the true source of illicit funds, complicating financial institutions' tracing efforts.

Investors are exploited in rug pull schemes by:

• Contributing funds to what appears to be a legitimate token or project.
• Unwittingly providing illicit operators with capital that is swiftly siphoned off.
• Encountering delayed or ineffective AML safeguards, as transactions initially seem like standard investments.
• Ultimately holding worthless tokens once the perpetrators vanish with the liquidity.

Investors, often unaware of the scheme’s fraudulent nature, contribute legitimate funds to these token offerings, unintentionally merging clean capital with criminal proceeds. By participating in an unregulated or poorly vetted ICO/IDO, they:

• Provide criminals an avenue to convert illicit funds into ostensibly genuine contributions.
• Complicate financial institutions’ ability to distinguish legitimate investor money from proceeds of crime.

This unwitting involvement enables criminals to launder capital more effectively, as mixing licit and illicit funds rapidly obscures the true origin.

Investors can amplify trade misinvoicing by:

• Channeling cross-border capital flows labeled as foreign direct investment without accurately disclosing the underlying trade arrangements.
• Combining misrepresented invoice values with FDI transfers in jurisdictions with limited oversight, enhancing layering opportunities and obscuring the actual origin of funds for financial institutions.