Life policies – case study 13

A financial adviser approached a life insurance company in order to make a pre application enquiry on behalf of a prospective customer to PEP classifications and other issues. The potential applicant was married to a former president of a developing country who was in self-imposed exile due to outstanding criminal matters. The spouse was seeking a whole life product in order to protect her tax liabilities. However, the husband was implicated in a multi-million dollar theft of public state money. The business was rejected and a report made to the FIU.

Life policies – case study 14

A company director from Company W, Mr H set up a money laundering scheme involving two companies, each one established under two different legal systems. Both of the entities were to provide financial services and providing financial guarantees for which he would act as director. These companies wired the sum of USD1.1 million to the accounts of Mr H in Country S. It is likely that the funds originated in some sort of criminal activity and had already been introduced in some way into the financial system. Mr H also received transfers from Country C. Funds were transferred from one account to another (several types of accounts were involved, including both current and savings accounts). Through one of these transfers the funds were transferred to Country U from a current account in order to make payments on life insurance policies. The investment in these policies was the main mechanism in the scheme for laundering the funds. The premiums paid for the life insurance policies in Country U amounted to some USD1.2 million and represented the last step in the laundering operation.

Life policies – case study 15

A husband and wife took out a life insurance policy each in their own name with annual premiums. In the event of the death of one of the spouses, the other spouse would become the beneficiary of the insurance. The holder of the account through which the premiums had been paid was found not to be the policyholders but a company abroad of which they were directors. However, this was a life insurance policy taken out privately by the couple and not by the company. Investigation revealed that the scenario set up had been intended to conceal the illicit origin of the funds which originated from serious and organised tax fraud for which the couple involved was known.

Life policies – case study 16

A fraudulently bankrupt subject used an account in the name of a family member to pay cash in and withdraw it out via a cheque to a lawyer. The lawyer then gave some money back in a cheque to the family member while the rest went to the subject’s single premium life policy which was immediately surrendered. The surrender value was paid out to the family member’s account.

Non-life – case study 17

Numerous motor vehicles owned by a number of companies were insured. As part of the process for setting up the insurance policies various company documents were reviewed by the insurer. The companies had been incorporated during 1994-1995 when Mr X was 24 years old. The registered business activities of the companies set out significant investments that did not correspond to the age and status of Mr X. The companies appeared to be linked to other persons related to Mr X and were incorporated with the same address. Subsequently Mr X refused to provide information on the origin of the funds used to acquire the motor vehicles. A report was submitted to the FIU and an investigation was instigated.

Non-life – case study 18

A money launderer purchased marine property and casualty insurance for a phantom ocean-going vessel. He paid large premiums on the policy and suborned the intermediaries so that regular claims were made and paid. However, he was very careful to ensure that the claims were less than the premium payments, so that the insurer enjoyed a reasonable profit on the policy. In this way, the money launderer was able to receive claims cheques which could be used to launder funds. The funds appeared to come from a reputable insurance company, and few questioned the source of the funds having seen the name of the company on the cheque or wire transfer.

Copies of the paper are available. http://www.iaisweb.org/view/element_href.cfm?src=1/20141.pdf