Fictitious Consulting Firm

Fictitious consulting firms operate as sham advisory businesses, issuing inflated or non-existent service invoices to mask the criminal origin of funds under the guise of legitimate fees.

Criminals establish fictitious advisory firms that lack genuine operations, making it very difficult for financial institutions to verify their true beneficial owners or the legitimacy of their consulting activities. By misrepresenting the nature of the customer entity, they circumvent standard KYC measures and obscure illicit fund flows.

The technique exploits intangible consulting services, which are easily fabricated and difficult to corroborate, to mask illicit payments as legitimate advisory fees. Unlike customer identity issues, this additional vulnerability arises from the inherent nature of professional consultancy services, which require minimal documentation and can obfuscate the true purposes of transactions.

Identifies individuals holding public or political positions who may be involved in large-scale corruption schemes masked by fictitious consulting. Cross-referencing parties against PEP databases helps expose heightened risk scenarios where corrupt officials channel illicit funds through inflated advisory fees.

OSINT involves gathering publicly available information from websites, social media, and other open sources to verify a firm's actual business presence, operational footprint, and staff. These details help identify virtual or shell offices that may indicate a fictitious consulting setup.

Captures contracts, invoices, payment terms, and service descriptions, enabling the comparison of stated consulting work against actual deliverables. This helps detect repetitive short-term engagements, inflated charges, or nonexistent outputs characteristic of fictitious advisory billings.

Transaction logs capture the flow of funds into and out of the fictitious consulting firm, including timestamps, amounts, sender/receiver details, and associated reference data. This enables the detection of rapid inflows followed by quick outflows, layering maneuvers, and inflated consulting fees that exceed typical market norms.

Maintains verified customer identities, beneficial ownership details, and risk profiles, facilitating the comparison of disclosed consulting operations versus actual activities. This helps identify front entities, low-substance operations, or conflicting ownership information central to fictitious consulting schemes.

Provides official registration details, beneficial owner identities, and records of shareholding or directorship changes. This information uncovers overlapping control or sudden shifts in ownership structures, which are hallmarks of collusion and shell firm misuse in the context of fictitious consultancies.

Require verifiable documentation on the firm’s consulting clients and actual deliverables. Confirm real business premises (beyond a virtual office) and verify beneficial owners for any entity claiming to perform advisory services. Confirm the scope of work, invoice details, and customer references to detect inflated fees or nonexistent projects, thus countering fictitious consulting schemes.

Implement tailored rules to flag recurring high-value "consulting" invoices that lack detailed supporting documentation, especially when fees exceed typical industry benchmarks or quickly move to multiple jurisdictions. Escalate suspicious payment patterns, such as same-day inflows and outflows or repetitive short-term engagements, that appear disconnected from genuine consulting work.

• Screen employees responsible for corporate account onboarding and transaction approvals for prior misconduct or conflicts of interest that could facilitate client collusion.
• Ensure robust vetting and continuous monitoring of staff in positions vulnerable to bribery or insider recruitment by operators of fictitious consulting entities.

Cross-check the purported consulting entity’s online presence (e.g., professional listings, social media, public websites), licenses, and client testimonials to validate authenticity. Use external databases and media reports to pinpoint inconsistencies, such as nonexistent offices or staff, to uncover fake advisory operations designed to disguise illicit transactions.

Limit or suspend high-risk cross-border money transfers labeled as consulting fees if ongoing monitoring suggests the firm lacks legitimate operational substance (e.g., repeated inability to provide proof of actual services). Require proof of client deliverables or real staffing before permitting large advisory payments to mitigate layering risks.

Periodically re-check the advisory firm’s business model, principal clients, and ownership profile for shifts in beneficial ownership or suspicious fee structures. Request updated project documentation for newly claimed engagements or significantly increased billing to detect evolving efforts to launder proceeds through sham consultancy arrangements.

• Fictitious consulting firms open business bank accounts to receive purported advisory fees, allowing criminals to deposit illicit proceeds under the façade of legitimate services.
• The intangible nature of consulting makes it difficult to verify whether actual work was performed, enabling the layering of funds across multiple jurisdictions.
• By channeling funds through these accounts, perpetrators seamlessly blend illicit cash with any genuine transactions, complicating AML oversight.

• Criminals fabricate or inflate invoices for nonexistent consulting work, legitimizing large inflows of illicit money as advisory revenue.
• These fictitious receivables serve as documentary cover, masking suspicious transaction patterns behind routine business settlements.
• Minimal documentary requirements for intangible services make it easy to generate plausible 'professional' invoices without raising immediate red flags.

• Perpetrators generate inflated or entirely fabricated invoices for consulting work, using structured platforms that mask the absence of genuine business activity.
• Automated invoice workflows create plausible payment records, reducing immediate red flags during AML reviews.

• Perpetrators maintain only a nominal business presence (e.g., a mail drop or P.O. box) while handling high volumes of transactions, concealing the absence of real operations.
• The lack of substantial on-site activity hinders verification efforts, creating an illusion of legitimacy for the fraudulent consulting firm.

• Criminals establish sham consulting firms under this service category, issuing invoices for nonexistent or minimal work to justify inflows of illicit funds as legitimate fees.
• Inflated or unexplained charges for intangible “advisory” tasks make it challenging for financial institutions to detect money laundering, enabling illicit proceeds to be layered into the system.

• Fraudulent consultancies open business accounts to receive purported advisory fees, blending illicit proceeds with legitimate transactions.
• The ability to conduct routine banking operations in the entity’s name aids in layering funds and disguises illegal revenue streams as consulting income.

• Criminals move large sums across borders under the pretext of legitimate consulting payments, obscuring the true source of funds.
• Speedy and international transfers enable complex layering schemes, frustrating efforts to trace actual beneficial owners or transaction origins.

• Offenders exploit corporate formation and administration offerings to register fictitious entities with complex ownership structures, masking beneficial owners.
• These services help evade scrutiny by layering control under multiple nominees and jurisdictions, facilitating the fraudulent consulting façade.

Politically exposed persons exploit sham consulting engagements for large-scale corruption by:

• Channeling bribes or embezzled funds through inflated advisory contracts to conceal official misconduct.
• Leveraging their status to evade scrutiny and blend illicit proceeds with legitimate payments, frustrating financial institutions’ corruption detection efforts.

Professional money launderers facilitate this subtechnique by:

• Establishing or managing bogus consulting firms that move illicit funds under the guise of advisory fees.
• Providing phony documentation and layering transactions across multiple jurisdictions, obstructing financial institutions' due diligence.

Beneficial owners conceal their identity behind fictitious consulting firms by:

• Using complex corporate layers and nominal directors to obscure ultimate control.
• Directing illicit funds through fraudulent invoices labeled as advisory fees, undermining financial institutions' attempts to identify true ownership.

Shell or front companies function as fictitious consulting firms when:

• They lack genuine operations yet issue professional invoices, allowing illicit income to appear as legitimate consultancy fees.
• Their opaque structures frustrate financial institutions' beneficial ownership checks, enabling criminals to launder proceeds with minimal scrutiny.

Consultants or advisors knowingly support fictitious consulting schemes by:

• Creating or endorsing sham advisory contracts and invoices for nonexistent or inflated services.
• Colluding with criminal clients to legitimize illicit proceeds as consulting fees, hindering financial institutions' ability to detect fraudulent transactions.