Brokers risk laundering dirty money

A report from the OECD’s Financial Action Task Force on money laundering concludes brokers often have ‘little or no training in anti-money laundering issues’ even though they are used to placing ‘cash funds into various financial institutions’.

In one case study, a drug trafficker – later arrested – bought $250,000 worth of life insurance via a broker, who delivered the money to a bank.

Because the bank knew the broker, no suspicions were raised. The international trade in gold is vulnerable to money laundering because of its ‘high intrinsic worth and compact nature’.

The report warns regulations to prevent the abuse are not ‘enforced consistently’. As well as the trade in gold with dirty money, the report warns of false invoices being raised for gold that is never actually bought and sold and then the VAT is claimed for.

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