Consulting Firm Schemes

By systematically commingling illicit proceeds with legitimate consulting revenues, criminals merge dirty money into ordinary business income, making it appear legitimate and minimizing suspicion.

Criminals exploit opaque or complex ownership by establishing or controlling consulting firms as the 'customer' of financial institutions. By commingling illicit proceeds with legitimate consulting fees and obscuring beneficial ownership through shell or front structures, they frustrate due diligence and hide the true source of funds. This exploitation of the consulting firm's ownership arrangement is the primary vulnerability.

The technique relies on secrecy-friendly jurisdictions to incorporate or operate consulting entities, leveraging weak AML oversight and relaxed disclosure requirements. By funneling illicit proceeds across these jurisdictions, criminals add additional layers of opacity, making investigatory efforts more difficult for authorities and financial institutions.

• Consolidates risk profiles of various jurisdictions, including known secrecy havens or offshore centers.
• Flags consulting firms routing transactions through high-risk regions without legitimate reasons, revealing possible efforts to obscure illicit flows.

Provides official financial statements, tax returns, and related filings that help verify declared consulting revenues, operational expenses, and tax compliance. These records enable analysts to detect discrepancies in reported income, identify artificially inflated fees, and confirm whether criminals are using timely tax payments to appear more credible while concealing illicit proceeds.

• Contains contractual agreements, invoicing details, billing schedules, and supporting documentation.
• Facilitates detection of inflated fees, nonexistent services, or suspicious consulting engagements used to disguise illicit funds as legitimate revenue.

• Records full details of financial transactions, capturing timestamps, amounts, parties, and references.
• Supports cross-referencing of actual payments with consulting invoices to pinpoint inflated or fabricated transactions indicative of laundering.

• Provides aggregated data on individuals and businesses, including names, registration details, beneficial ownership, and entity status.
• Enables verification of the legitimacy of purported consulting clients, helping to identify fictitious or shell entities used to inflate revenue or commingle illicit proceeds.

• Details a firm's day-to-day operational scope, staffing levels, physical premises, and overhead.
• Highlights discrepancies where reported consulting revenue far exceeds observable business capacity or real-world operations.

• Contains verified customer identities, business profiles, ownership information, and AML risk assessments.
• Enables detection of undisclosed relationships, suspicious backgrounds, or repeated misuse of consulting services to launder funds.

• Provides official registration data, corporate ownership structures, and beneficial owner details.
• Helps investigators uncover shell or offshore entities behind consulting operations and trace ultimate owners linked to illicit activities.

Conduct thorough verifications of the consulting firm’s beneficial ownership, operational capacity, and stated service engagements. Confirm the actual existence of core personnel and the authenticity of client references. Scrutinize any non-transparent or inflated fee structures by comparing them to industry norms, exposing nominal or nonexistent services used to disguise illicit funds as consulting revenue.

Configure specialized scenarios to detect abnormally large or repetitive consulting invoices that are inconsistent with typical advisory fees. Flag sudden spikes in revenue from unrelated third parties, high-risk jurisdictions, or invoices lacking sufficient detail. These targeted rules help isolate and investigate artificially inflated consulting revenues frequently used to integrate illicit proceeds.

Leverage public records, business registries, and open-source intelligence to verify the consulting firm’s declared operations, official registrations, client portfolio, and physical presence. Confirm legitimate business activities, staff credentials, and contract deliverables to detect bogus or exaggerated consulting engagements that may be used to commingle illicit funds.

Periodically reassess the consulting firm's transactions, monitoring for persistent spikes in fees, expansion into secrecy-friendly jurisdictions, or abrupt additions of unexplained client accounts. Investigate sudden changes in invoice volume or payment flows to identify emerging misuse of consulting services for laundering.

• Criminals establish or control consulting firm bank accounts that receive both legitimate client payments and illicit funds disguised as consulting fees.
• The intangible nature of the services allows funds to be deposited without raising immediate suspicion, especially when tax payments and regular documentation create an appearance of legitimacy.
• By mingling illicit inflows with genuine revenue, offenders obscure the illegal source of funds, frustrating due diligence and transaction monitoring by financial institutions.

• Consulting firms in secrecy-friendly jurisdictions may issue bearer shares, masking the real owner’s identity.
• Criminals exploit this structure to operate through a shell entity while concealing beneficial ownership, reducing transparency for financial institutions and regulators.
• The anonymity afforded by bearer shares makes it significantly more difficult to link consulting firm revenues—which include illicit proceeds—to their true unlawful source.

• Inflated or fictitious invoices for consulting services are used to justify large payments that actually represent illicit funds.
• Since consulting work is intangible and pricing is non-transparent, criminals can easily create plausible documentation for income.
• These fabricated receivables transform illegal proceeds into 'legitimate' business revenue on the consulting firm’s books, making straightforward detection by financial institutions or regulators more difficult.

• Criminals use notarized documents to grant a veneer of legitimacy to fraudulent or partial consulting agreements.
• The notary’s seal and signature can mislead due diligence checks, making it appear as though real services were rendered.

• Criminals exploit the intangible nature of consulting work by issuing inflated or fictitious invoices to blend illicit proceeds with lawful fees.
• Non-transparent pricing structures and flexible service definitions allow for easy manipulation of fee arrangements, concealing the true source of funds.

• Criminals establish consulting firms in secrecy-friendly jurisdictions, reducing transparency and regulatory scrutiny.
• Offshore entities help disguise the firm’s true principals and commingle illicit funds by exploiting relaxed disclosure requirements.

• Criminals create or manage shell consulting entities through corporate and trust arrangements, hiding the true beneficial owners behind complex structures.
• These layers of legal entities make it difficult for authorities to trace the origin of funds, enabling illicit proceeds to be laundered under the guise of legitimate consulting revenue.

Illicit operators knowingly incorporate or take control of consulting firms:

• They systematically commingle illicit proceeds with legitimate consulting revenues, making it harder for financial institutions to identify suspicious inflows.
• They often present partial or spurious documentation to justify large payments.
• By securing inflated or unfulfilled consulting contracts, they divert public or private funds to appear as ordinary business income.

These tactics obscure the true criminal source of funds and frustrate due diligence efforts.

Shell consulting entities are incorporated or repurposed to:

• Conceal beneficial ownership through complex or offshore corporate arrangements.
• Maintain minimal or no real operational presence, yet generate sizeable 'consulting' revenue.

These structures hinder financial institutions' ability to discern true ownership and transaction authenticity, thereby facilitating the laundering process.

Legal professionals, including notaries, are exploited when:

• Criminals procure notarized agreements to legitimize partial or fabricated consulting services.
• The notarization confers an appearance of legality, hindering financial institutions’ screening and due diligence.

While notaries may be unaware, their services inadvertently lend credibility to fraudulent documentation.

Criminals exploit consulting or advisory businesses by:

• Issuing inflated or fictitious invoices under the guise of intangible services.
• Leveraging non-transparent pricing and minimal documentation to blend illicit funds with legitimate revenue.

This undermines financial institutions' ability to assess the legitimacy of fees, masking the illicit origins of the payments.