Negotiable instruments issued by a bank, drawn on the bank’s own funds, and payable to a specified party. Often used for high-value or guaranteed transactions, providing greater security than personal checks or money orders.
Main/
Bank Drafts
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Code
IN0025
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Name
Bank Drafts
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Version
1.0
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Category
Fiat (Physical/Digital) & Paper-Based Payment Instruments
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Created
2025-03-12
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Modified
2025-04-02
Related Techniques
- Shell companies frequently use bank drafts to transfer large sums without clearly revealing the original source of funds.
- Drafts carry bank-backed credibility, portraying transactions as legitimate business payments rather than suspicious wire transfers.
- Criminals layer illicit proceeds by drawing multiple drafts, complicating financial institutions' ability to trace the true nature of funds.
- Criminals convert illicit cash into bank drafts (cashier’s checks), giving the appearance of legitimate bank-approved payments.
- They can acquire drafts in controlled amounts from different financial institutions, masking the illegal origin of the total sum.
- Because these instruments are perceived as secure and vetted, real estate transactions funded by them often evade deeper scrutiny regarding the origins of the cash.
- Criminals with infiltration can issue official bank drafts supported by falsified information or without valid documentation.
- These drafts carry the credibility of the infiltrated institution, making suspicious movements less likely to be challenged.
- Large sums can be transferred under the appearance of legitimate corporate payments, complicating law enforcement scrutiny of the funds’ true origin.
- Bank drafts are considered secure, bank-backed payment instruments, enabling criminals to convert illicit cash into seemingly legitimate funds.
- By splitting larger sums into multiple smaller drafts, they avoid triggering scrutiny or reporting requirements.
- Once issued, the drafts can be deposited across various accounts or locations, making it difficult for investigators to trace the cash's origin.
- Criminals exploit bank drafts through remote deposit capture by scanning official-looking drafts, which may be forged or altered, to bypass in-person verification.
- The perceived legitimacy of a bank draft can reduce scrutiny, enabling swift deposits and subsequent fund transfers to obscure the transaction trail.
- Remote submission workflows allow repeated deposits of nearly identical drafts before detection occurs.
- Offenders manipulate bank drafts by overwriting payee names or amounts, producing altered documents that still appear formally issued.
- Because bank drafts are perceived as secure and guaranteed, these forged versions can evade casual inspection, enabling illicit funds to slip into legitimate payment flows.