Common Offenses

Common offenses refer to activities that generate illicit proceeds and qualify as predicate offenses for money laundering.

Criminals leverage cash-intensive businesses (for mixing illicit funds with high volumes of legitimate cash transactions), informal remitters (facilitate the movement of funds across borders), and peer-to-peer platforms (offer anonymity and ease of transactions) as primary channels to integrate the smaller proceeds of common offenses. By depositing funds in lower amounts, they exploit less scrutinized conduits, blending illicit cash with legitimate transactions and escaping typical detection thresholds.

• Provides detailed records of financial transactions (e.g., timestamps, amounts, counterparties, and channels).
• Facilitates detection of patterns such as multiple small-value deposits, sub-threshold structuring, and frequent peer-to-peer payments.
• Helps identify anomalies in cash-intensive business operations, supporting investigations into potential laundering of illicit proceeds derived from common offenses.

• Aggregates information on individuals and entities, including legal registration, public records, and known affiliations.
• Confirms whether individuals or associated businesses have ties to known petty crime or street gang activities.
• Enhances due diligence efforts by cross-referencing relevant profiles against suspected or confirmed criminal backgrounds.

• Consolidates transaction details from P2P or digital payment services, including user identifiers, transfer volumes, and timestamps.
• Supports identification of repeated small payments that collectively form significant sums, potentially used to layer illicit funds.
• Facilitates detection of unusual P2P transaction clusters lacking a legitimate economic rationale.

• Lists officially licensed or regulated money remitters, including their operational details.
• Aids in detecting unregistered or informal money transfer providers commonly used for laundering smaller proceeds from street-level offenses.
• Supports better scrutiny of remittance flows and helps flag irregular cash movements via unlicensed entities.

• Provides operational metrics such as revenue figures, foot traffic data, and expense patterns.
• Enables comparison between reported revenues and actual business capacity, highlighting unexplained cash surges.
• Assists in identifying suspicious spikes in reported income at smaller businesses that may be used to launder proceeds of common offenses.

• Contains verified identification details, business profiles, and risk ratings of customers.
• Reveals inconsistencies between declared earnings or business activities and actual financial behavior.
• Helps detect accounts or beneficial owners with prior petty crime or gang affiliations, refining AML risk assessments for common offenses.

Apply deeper scrutiny to customers with prior minor offenses, gang affiliations, or unsubstantiated cash-intensive operations. Verify the legitimacy of their funding sources and maintain ongoing oversight to ensure transactions align with legitimate activities. By demanding thorough documentation and regular reviews, Enhanced Due Diligence (EDD) deters criminals from depositing smaller volumes of illicit proceeds over time.

Obtain and verify accurate personal or business information from customers likely to deposit smaller amounts of cash. Cross-reference stated business activities with expected revenue levels to identify discrepancies that might indicate proceeds from street-level crimes. This measure ensures that only legitimate sources of income are accepted and documented from the outset.

Implement scenario-based detection rules focusing on repeated small cash deposits or peer-to-peer transactions that collectively exceed typical account usage patterns. Incorporate sub-threshold structuring detection by monitoring consecutive low-value deposits from multiple related parties within a short timeframe. This control addresses criminals generating proceeds from petty offenses and attempting to slip under detection thresholds.

Train frontline staff to identify patterns consistent with small-scale laundering tied to common offenses, such as frequent sub-threshold deposits or unexplained surges in cash receipts. Establish clear escalation protocols for any suspicious deposit activity inconsistent with a customer's typical profile or local business norms.

Categorize customers who frequently handle small cash transactions or operate in areas with high petty crime rates into higher-risk segments. Calibrate monitoring thresholds and triggers accordingly to ensure that potential structuring or surges in petty cash inflows are promptly flagged. This measure targets vulnerabilities arising from blending illicit earnings from local crimes with legitimate funds.

Investigate publicly available records, community forums, and news reports for newly formed or suspicious businesses tied to individuals with local gang affiliations. Cross-check external data against internal deposit patterns to uncover attempts to mask petty crime proceeds by operating sub-threshold transactions through seemingly legitimate channels.

Establish formal communication channels with law enforcement, industry consortia, and other financial institutions to exchange intelligence on localized crime patterns, frequent cross-branch deposit behaviors, and known gang affiliations. Incorporate these insights into risk models and monitoring thresholds to enhance the detection of smaller-scale laundering methods.

Continuously review account activity, paying special attention to customers operating in cash-heavy industries or with known petty crime records. Reassess the legitimacy of incremental cash inflows, ensuring that repeated smaller deposits do not collectively become substantial illicit sums. This measure addresses the long-term layering of petty crime proceeds.

• Offenders open or utilize existing personal or business bank accounts to deposit small sums of illicit cash, blending them with legitimate transactions.
• By structuring these deposits below typical monitoring thresholds, criminals avoid red flags, especially when the accounts are linked to cash-intensive businesses whose daily receipts often fluctuate.
• This practice hinders financial institutions’ ability to distinguish illicit funds from normal account activity.

• Criminals purchase multiple money orders in amounts below reporting thresholds to convert physical cash into more structured instruments.
• Depositing or cashing these money orders at varied times and locations obscures the transaction trail.
• Individual money orders often remain below reporting thresholds, making it difficult for financial institutions to identify potential structuring or aggregated sums of illicit proceeds.

• Criminals involved in petty theft, robbery, or extortion typically receive physical currency directly from victims or illicit activities.
• They then deposit small increments of this cash into the financial system (e.g., daily store deposits at a cash-intensive business), mitigating detection risks by remaining under reporting thresholds.
• Because cash lacks intrinsic identifiers, tracing the original criminal source is particularly challenging when it is commingled with legitimate revenue.

• Criminals load or reload prepaid cards and digital wallets with relatively small amounts of illicit cash, typically below transaction reporting limits.
• Distributing smaller sums across multiple stored-value instruments makes it harder for authorities to piece together the overall funds flow.
• These platforms often have less stringent documentation requirements compared to traditional bank accounts, facilitating anonymity and reducing the likelihood of triggering AML alerts.

• Offenders conduct multiple small cash deposits or withdrawals at branches, remaining below typical reporting thresholds.
• The physical handling of smaller cash transactions reduces scrutiny, enabling proceeds from minor crimes to enter the financial system undetected.

• Offenders break down illicit proceeds into multiple small P2P transfers, slipping under typical transaction reporting thresholds.
• Rapid, direct exchanges with minimal customer identification requirements obscure the scale and source of accumulated funds.

• Criminals deposit small sums of cash proceeds from common offenses as part of daily legitimate revenue, making irregular spikes in deposits harder to detect.
• By intermingling illicit funds with normal business transactions, they avoid triggering typical AML thresholds for suspicious cash activity.

• Criminals split illicit funds into numerous small remittances, often evading more robust checks applied to larger transfers.
• Utilizing informal or lightly regulated corridors, they minimize record-keeping, making it challenging for authorities to trace or detect the illicit origin.

Organized crime groups, including local street gangs, generate smaller but steady flows of illicit proceeds from theft, robbery, or assault-related extortion. They knowingly channel these funds into the financial system by:

• Splitting cash into multiple small deposits at cash-intensive businesses, peer-to-peer platforms, or informal remitters.
• Using low-value transactions to bypass typical monitoring thresholds, making detection more challenging for financial institutions.

Peer-to-peer payment platforms enable direct transfers between individuals with fewer formal checks. Criminals misuse these platforms by:

• Splitting illicit proceeds into multiple small transfers to stay below suspicion thresholds.
• Leveraging rapid, direct exchanges that reduce the visibility of cumulative sums for financial institutions.

Informal remitters operate beyond conventional banking channels, providing anonymity and requiring minimal documentation. Criminals exploit these operators by:

• Sending multiple low-value transfers that collectively move significant illicit proceeds.
• Circumventing standard transaction records, which complicates the tracing of funds for financial institutions.

Cash-intensive businesses frequently handle large volumes of physical currency, making them vulnerable to unwitting exploitation by criminals. Through intermingling legitimate and illicit cash:

• Criminals deposit small sums under daily revenue, masking suspicious spikes.
• Financial institutions’ monitoring efforts are hampered by commingled, lower-value transactions that appear routine.