Money Laundering and Your Bank Accounts – Part I – Hiding Information

money laundering machine
Businesses and individuals don’t know what banks are looking for when deciding to open an account; it used to be so easy!  Anti-money-laundering and terrorist financing detection regulations are the problems.

Over the next few blogs, we will alert you to a number of things that legitimate banks must check. If you want to avoid difficulties, don’t stray into any of these areas.

The first customers that regulators look for are those who provide insufficient or spurious information. When such situations arise, the money laundering alarms will ring and the bank will take significant actions to resolve the situation; usually not to your benefit.

Identification Problems

The customer uses unusual or suspicious identification documents that cannot be readily verified.
His chances of opening an account are almost nil at any bank that he can actually trust with his money if they don’t believe his identity is real.

When the customer first opens the account he gives a taxpayer ID and then later provides a different sort of taxpayer ID. For example, in the U.S. he provides an individual taxpayer identification number after earlier providing a Social Security number.

The customer uses different identification numbers with variations of his or her name.
The customer may not know this, but banks design their software to detect such frauds.

A business won’t provide complete information about the nature and purpose of its business, anticipated account activity, prior banking relationships, the names of its officers and directors, or information regarding its place of business.
Of course, a customer who conceals facts sets off money laundering alarms.

Verification

The phone company says that customer’s home or business telephone is not in service.
Why would someone opening a legitimate bank account provide a bad phone number? In fact, banks don’t believe they would; they’re probably money laundering or terrorists.

Suspicious Activity

The customer’s background differs from that which would be expected on the basis of his or her business activities.
If someone leaves his job in one field to start a business in another field may have this problem. He will need to give a convincing reason for accepting this.

The customer makes frequent or large transactions and has no record of past or present employment experience.

The customer is a trust, shell company, or Private Investment Company and is reluctant to provide information on controlling parties and underlying beneficiaries. In such cases, beneficial owners may hire nominee incorporation services to establish shell companies and open bank accounts for those shell companies while shielding the owner’s identity.
Anonymous intermediaries are one of the most common problems banks have with prospective accounts. Unsurprisingly, bank regulators don’t trust them and proper jurisdictions provide one way or another for revealing the beneficial owners of the account. Banks must know their customers and anonymous intermediaries prevent that.

You must beware of over a hundred other things that banks may use to impair your account. Deal with the professionals at Hilda Loe Associates to maximize your chances of opening a bank account.

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