Fictitious Sales

Fictitious sales explicitly convert illicit proceeds into what appear to be legitimate commercial income, allowing criminals to merge these funds permanently into bona fide business accounts at the final stage of laundering.

Criminals fabricate commercial activity under shell or front companies, reporting contrived sales volumes and concealing the true source of funds and beneficial ownership. By misrepresenting themselves as legitimate customers with normal business inflows, they exploit the institution's customer onboarding and monitoring processes to hide illicit proceeds as regular revenue.

Payments are often routed through shell or cover companies in jurisdictions with weak oversight or limited AML controls. This makes it difficult for financial institutions and investigators to track beneficial ownership or validate the legitimacy of stated commercial transactions.

• Comprises official financial statements, profit-and-loss reports, and tax filings.
• Reveals discrepancies between reported sales and declared income, helping identify fabricated or overstated revenue streams.
• Corroborates or contradicts claims of legitimate commercial activity through comparison with operational capacity and transactional records.

• Provides detailed invoices and contractual agreements, including item descriptions, amounts, payment terms, and parties involved.
• Enables cross-checking for inflated prices, repetitive anomalies, or missing product details, revealing artificially created or overstated sales transactions.

• Captures bidding and payment logs on online auction and payment platforms.
• Identifies staged or nonexistent competition, repeated winning by the same bidder, or other auction irregularities, uncovering sham or fictitious sale events.

• Provides an organization’s operational metrics, reported revenues, and business capacity.
• Identifies sudden spikes in reported sales without corresponding operational evidence, signaling potentially fictitious or inflated revenues.

• Contains shipping logs, customs declarations, and bills of lading.
• Verifies whether goods are genuinely shipped or delivered, exposing fabricated transactions when the physical movement of merchandise is absent or contradicted.

• Consolidates verified identities, addresses, beneficial ownership information, and risk assessments.
• Helps detect shell or cover entities lacking verifiable operating history, confirming whether purported sellers or buyers are legitimate.

• Contains official registration and ownership details of businesses, including shareholders, directors, and historical ownership changes.
• Reveals shell or cover companies lacking genuine corporate substance, enabling detection of entities potentially used to orchestrate fictitious sales.

Perform deeper checks on customers or transactions exhibiting signs of fabricated sales, such as sudden spikes in business revenue or reliance on incomplete shipping records. Validate the existence of goods, examine the beneficial ownership of involved entities (especially shell companies), and corroborate declared sales with external references. This heightened scrutiny uncovers falsified documents and hidden links to illicit funds.

Apply scenario-based rules or analytics to flag repetitive or high-value incoming payments claimed to be for sales without evidence of genuine bidding activity. Identify patterns such as multiple identical invoices, circular fund flows between the same parties, or transactions at inflated prices with no authentic business rationale. Escalate these alerts for deeper investigation of potential bogus sales.

Hold funds in a controlled escrow environment until the seller presents credible proof of legitimate goods or services, such as verifiable shipping records or third-party confirmations. This prevents the completion of sham transactions and deters the use of fake invoices if no real exchange can be substantiated.

Use publicly available data sources (e.g., business registries, online marketplaces, social media) to validate the legitimacy of purported sellers, auction events, and actual product availability. Cross-check corporate addresses, business histories, and references to reveal sham auctions or fictitious merchandise, highlighting inconsistencies that standard documentation alone may not uncover.

Systematically reconcile invoices, shipping orders, and payment details with external market data to detect anomalies indicative of fictitious sales. For example, confirm that goods actually exist, shipping records match physical movements, and invoiced prices align with typical market values. Any inconsistencies are promptly escalated for investigation.

• Shell or front companies open bank accounts to receive payments from bogus sales transactions, presenting dirty money as routine business inflows.
• Funds derived from false invoices or staged auctions are deposited as normal operating revenue, complicating scrutiny by financial institutions.

• Falsified bills of lading, letters of credit, and related trade documents are produced to substantiate nonexistent import/export deals.
• These instruments legitimize supposed cross-border transactions, masking illicit funds as trade revenue and evading standard transactional checks.

• Sham merchants process credit or debit card charges for goods and services that do not exist, turning illicit funds into purported commercial receipts.
• Card transactions blend seamlessly with ordinary business billing, obscuring the absence of genuine sales activity.

• Fraudsters stage sham auctions or sales of high-value collectibles, assigning arbitrary or inflated prices to conceal the illicit origin of funds.
• Documents such as sales receipts and auction records reinforce the illusion of legitimate transactions, bypassing deeper verification of authenticity or actual ownership transfer.

• Criminals generate fraudulent invoices for nonexistent goods or services, creating a paper trail that justifies inflows of illicit funds as receivables for alleged sales.
• These bogus receivables falsely bolster the business’s commercial revenue, allowing illicit proceeds to appear as legitimate income in official accounts.

• Criminals produce or submit fraudulent invoices for goods or services that never existed.
• These platforms help legitimize documentation, disguising the absence of actual trade.

• Fraudsters list non-existent or sham products, receiving payments from collaborators or unwitting customers.
• Such platforms provide a public façade of legitimate retail transactions, integrating illicit funds as apparent sales revenue.

• Fraudsters generate shipping documents for goods that do not exist or were never actually dispatched.
• False transport records reinforce the illusion of legitimate trade for the fabricated sales.

• Criminals establish merchant accounts or payment gateways linked to sham businesses.
• They process credit card or other electronic payments for non-existent goods or services, disguising illicit funds as genuine commercial receipts.

• Criminals channel proceeds from phony sales into dedicated business accounts, claiming it as commercial income.
• Routinely transacting through these accounts helps disguise illegal funds as legitimate operating revenue.

• Criminals commission or manipulate professional document preparation to produce fake contracts, shipping records, and invoices.
• The resulting paperwork validates the pretense of authentic sales transactions.

• Criminals stage auctions with no genuine bidders or artificially inflated bids.
• Once ‘winning’ transactions settle, illicit funds enter the system, masked as legitimate auction proceeds.

• Fraudsters present fictitious or inflated invoices to secure early payouts from lenders or factors.
• This makes the fake ‘accounts receivable’ appear legitimate, quickly injecting illicit funds into the business.

• Criminals form shell or cover companies to issue invoices for nonexistent goods or services.
• These corporate entities obscure true ownership and transaction flows, complicating investigations into origin of funds.

Professional money launderers facilitate fictitious sales by:

• Creating or advising on sham invoicing schemes and staged auctions on behalf of criminal clients.
• Structuring transaction flows through multiple accounts and jurisdictions, ensuring illicit income appears as legitimate commercial proceeds.

By crafting sophisticated paper trails, they help clients evade scrutiny from financial institutions’ compliance checks and law enforcement inquiries.

Illicit operators orchestrate fictitious sales by:

• Advertising non-existent goods or staging sham auctions, generating outwardly legitimate commercial inflows.
• Channeling payments into the financial system as purported business revenue, disguising the illicit origin from financial institutions.

Their actions distort transactional records, making it difficult for banks or payment processors to detect that no actual trade has occurred.

Document forgers support fictitious sales schemes by:

• Producing or altering invoices, shipping records, and sales contracts to validate nonexistent transactions.
• Fabricating the appearance of goods or services in transit, concealing the lack of actual deliveries.

Their falsified paperwork undermines financial institutions' due diligence, masking red flags related to the authenticity of transactions.

Shell or front companies play a crucial role in fictitious sales by:

• Issuing fraudulent invoices or hosting accounts that receive payments for goods or services that do not exist.
• Operating within jurisdictions with weak oversight, making it difficult for financial institutions to trace beneficial ownership or identify the true source of funds.

These entities serve as nominal business fronts, merging illicit proceeds with purported commercial inflows to complete the final integration stage of laundering.