Financial Crime World

Money Laundering Surges in Puerto Rico: An Inside Look at the Island’s Emerging Trends

Money Laundering in Puerto Rico: A Major Hub for Illicit Transactions

Puerto Rico, an attractive location for money laundering due to its unique economy and offshore financial sector, has become a hotspot for criminal activity. In this article, we’ll explore the rising trends of money laundering in Puerto Rico.

What is Money Laundering?

  • The process of disguising the proceeds of illegal activities as legitimate income
  • Transactions are typically moved through complex networks of individuals and entities to conceal their illegal origin

Who Launders Money in Puerto Rico?

  • Criminals take advantage of various methods to launder money in Puerto Rico
  • Financial system, physical movement of cash, and trade-based money laundering are among the most common methods

The Financial System: Criminals’ Playground

  • Criminals misuse accounts, misuse loans, and use bearer negotiable instruments and international funds transfers

Wholesaling/MSBs

  • Money Service Businesses (MSBs) have been identified as significant risks to transparency
  • Check Cashing and Money Transfer agencies facilitate money laundering through their involvement in practice called “wholesaling”

Non-Federally Chartered Puerto Rican Financial Entities

  • IFEs (Interest Free Entities) and IBEs (International Business Entities) identified as major concerns due to offshore banking model, lack of adequate staffing, minimal physical presence, and absence of compliance programs for cryptocurrency transactions

Money Mules

  • Criminals recruit individuals to serve as money mules, moving funds through their bank accounts and physically transporting money

Trends - Cryptocurrency

  • Anonymity of cryptocurrencies makes them a favored tool for money laundering
  • Bitcoin is the most widely used, but alternatives like Litecoin, Ethereum, and Stablecoins present challenges

Trends - Regulations

  • Cryptocurrencies, when handled by businesses, are considered Money Service Businesses and must comply with anti-money laundering and counter-terrorist financing regulations

Contact

  • For more information on money laundering in Puerto Rico, contact:
    • IA Sofia Estrada, FBI San Juan Money Laundering Squad Intelligence Analyst: estradas@fbi.gov (787-966-5651)
    • TS Nadia Lopez, FBI San Juan Money Laundering Squad Tactical Specialist: lopezn4@fbi.gov (787-406-3741)