FinCEN warns on Mexican funnel accounts
AML AND COMPLIANCE NEWS |
The Financial Crimes Enforcement Network (FinCEN) recently issued an advisory to warn financial institutions about the increased use of "funnel accounts," which are often used in connection with trade-based money laundering schemes.
A typical funnel account receives multiple cash deposits below the reporting threshold in one geographic area, which are quickly withdrawn in a different geographic area. FinCEN believes such accounts may have grown in popularity since the Mexican government's move in 2010 to restrict the amount of U.S. cash that can be deposited in Mexican banks, exchange houses and brokerages.
According to FinCEN, there are several red flags that may indicate the presence of a funnel account. These include:
- New accounts (often in southwest border states) that receive multiple cash deposits by unidentified persons via branches in another geographic region.
- Depositors who have no detailed knowledge of the account's stated activity or source of cash.
- Checks that present different handwriting on the payee and signature lines.
- Payments that appear out of sync with the account's stated business activity.
- Multiple checks or wire transfers deposited into (or cleared through) the U.S. correspondent account of a Mexican bank.