Intermediary-Facilitated Transfers

By inserting complicit or unwitting intermediaries, criminals add multiple transactional steps that distance illicit funds from their origin, making it significantly harder for investigators to trace the ultimate beneficiaries. This is the primary objective of intermediary-facilitated transfers.

This technique focuses on concealing the true beneficial owner by using third-party intermediaries, who may be either complicit professionals or unsuspecting individuals. By inserting another party’s identity into official records, criminals exploit due diligence gaps related to beneficial ownership verification. This creates customer-related vulnerabilities and deprives institutions of critical risk indicators.

Relying on third-party facilitators for fund transfers and ownership layering exploits indirect or non-face-to-face channels, reducing the transparency and traceability needed to mitigate illicit transactions.

• Identifies high-risk or non-cooperative jurisdictions where intermediaries may operate to evade stricter AML controls.
• Flags intermediary accounts or transactions linked to regions with elevated money laundering vulnerabilities.

Houses official records of professional licenses, memberships, and affiliations for intermediaries such as lawyers, accountants, and brokers. This data supports AML investigations by verifying the legitimacy of intermediary services and identifying unlicensed or fraudulent operators who may facilitate nominee or straw-man arrangements.

• Contains information on trustees, beneficiaries, and trust agreements, helping identify layers of control established by intermediaries.
• Supports verification of whether a trust arrangement is legitimate or used to conceal beneficial ownership.

• Details agreements, invoices, and related payment documents, enabling detection of inflated or artificial service fees.
• Allows cross-checking whether reported intermediary services align with legitimate business operations.

• Provides comprehensive details of financial transactions, including timestamps, amounts, and involved counterparties.
• Enables detection of unusual routing through intermediary accounts, repeated usage of the same intermediary, or abrupt changes in intermediary usage patterns indicative of layering.

• Authenticates identification documents provided by intermediaries, detecting potential forgeries or mismatches.
• Flags inconsistent or incomplete documentation, suggesting nominee or straw-man involvement.

• Contains verified identity and beneficial ownership information, enabling the detection of hidden relationships or incomplete disclosures by intermediaries.
• Facilitates the validation of authorized signatories or proxies and cross-checking their stated roles.
• Supports jurisdiction-based risk assessments for intermediaries operating in high-risk or non-cooperative regions.

• Provides official registration and ownership details for companies, revealing hidden corporate structures that may be exploited through nominee arrangements.
• Assists in identifying shell companies or complex ownership chains frequently used by intermediaries to obscure ultimate beneficial owners.

Require more thorough background checks on professionals or individuals serving as intermediaries by reviewing their licensing, disciplinary records, beneficial ownership data, and potential conflicts of interest. Scrutinize unusual fee arrangements, multiple signatories, or proxies to uncover layering attempts or hidden beneficial owners.

Implement rules-based alerts and analytics to flag consecutive transfers through the same intermediary or clusters of intermediaries lacking clear commercial rationale. Examine payment flows that artificially distance the true beneficiary from the funds.

Establish a formal review process for external intermediaries to verify their legitimacy and business rationale. Conduct recurring assessments of ongoing engagements to detect suspicious expansions in intermediary scope or services that may signal layering.

Train frontline and compliance teams to recognize red flags in intermediary-facilitated transfers, such as the repeated use of the same professional across unrelated accounts or attempts to shield beneficial owner details. Emphasize rapid escalation protocols.

Cross-reference public databases, professional license registries, and media reports to validate an intermediary’s claimed role and uncover hidden connections or repeated mentions in high-risk transactions. This helps detect fraudulent straw men and nominee arrangements.

Restrict or freeze high-risk transactions when intermediaries cannot validate their role or produce valid mandates. Limit access to services where unexplained or suspicious third-party involvement continues, pending further verification.

Continuously review customer records for changes in designated intermediaries or signatories, and investigate any unexplained new representatives or sudden fee spikes. Escalate issues when documentation is incomplete or when transaction complexity suggests layering.

• Criminals direct complicit or unwitting intermediaries to open bank accounts in the intermediary’s name, routing illicit funds through these accounts.
• This arrangement obscures the true owner and adds a layer of separation between the criminal and suspicious transactions.
• Bank accounts held by legitimate third parties complicate beneficial ownership tracing for investigators.

• The criminal appoints an intermediary as the trust’s named beneficiary, enabling the criminal to remain unseen in official documentation.
• Control over trust assets effectively remains with the criminal, but legal records point to the intermediary as the beneficiary.
• This arrangement impedes investigators by separating beneficial rights from actual control.

• Ownership is evidenced by physical possession of the share certificates, allowing intermediaries to act as registered owners on paper.
• Criminals hand over or store bearer shares with a nominee, distancing themselves from official corporate records.
• This physical transfer mechanism thwarts typical beneficial ownership checks, enabling hidden control.

• Criminals procure nominees or third parties to hold shares or stakes in companies, typically shell entities, concealing who actually controls the business.
• Registration records list the intermediary as the official owner, hiding the criminal’s beneficial interest.
• This structure exploits corporate ownership rules, complicating beneficial ownership investigations.

• Complicit professionals, such as lawyers and accountants, establish trust accounts under their control or on behalf of clients, holding illicit proceeds without revealing the criminal’s identity.
• The legal structure of a trust and professional privilege obscure the true beneficiary, making it more challenging for authorities to link funds to the criminal.
• This intermediary arrangement provides distance between illicit assets and their actual owner.

• Complicit attorneys can craft legal structures or contracts that obscure the real owner behind nominee arrangements.
• Legal privilege may protect certain communications, making beneficial ownership verification more challenging.

• Brokers or consultants can open or manage accounts in their own or third-party names, adding a barrier between the criminal and suspicious transactions.
• Their professional status lends legitimacy to otherwise suspect financial flows, complicating AML controls.

• Complicit lawyers or accountants can maintain funds in their professional client accounts on behalf of criminals, distancing illicit proceeds from the actual owner.
• The separation of funds under the professional’s umbrella makes it harder to trace suspicious activity back to the true beneficiary.

• Criminals may rely on compliant or unwitting accountants to layer funds by creating elaborate paper trails.
• Fraudulent financial statements or bookkeeping entries can conceal the true flow and ownership of illicit proceeds.

• Criminals or complicit intermediaries use these services to form shell companies or trusts under nominee ownership, masking the real beneficiary.
• Trustees, nominee directors, or shareholder arrangements add extra layers that obscure beneficial ownership, impeding due diligence.

Complicit DNFBPs, including lawyers, accountants, brokers, or trust and company service providers, facilitate intermediary-facilitated transfers by:

• Registering accounts or holding assets in their names on behalf of criminals.
• Structuring entities or trusts that obscure beneficial ownership, complicating due diligence.

Their professional status adds a veneer of legitimacy that hampers financial institutions' ability to detect suspicious activity and trace ultimate beneficiaries.

Nominees, whether formal or informal, enable intermediary-facilitated transfers by:

• Holding legal title or shares for the true owner, concealing criminal involvement in official records.
• Managing assets or accounts under their identity, distancing the criminal from financial institution scrutiny.

These arrangements create multiple layers of ownership that impede beneficial ownership verification and complicate investigations.

Unwitting money mules facilitate intermediary-facilitated transfers by:

• Allowing criminals to use personal accounts for routing illicit proceeds, often without full awareness of wrongdoing.
• Adding transaction steps that appear legitimate and distancing the primary criminal actor from suspicious flows.

This extra layer makes it harder for financial institutions to detect the illicit source and ultimate beneficiary of the funds.