Thailand’s Complex Web of Financial Crimes: Money Laundering Through Nominees and Trade Schemes

Bangkok− Money laundering, once a discreet underworld activity, has evolved into a transnational threat. Criminal syndicates now take advantage of advanced technologies and complex schemes to hide their ill-gotten gains. Two such techniques, hiring nominees to open bank accounts and trade-based money laundering, have become increasingly common in Thailand.

Hiring Nominees

[Image of person being deceived, captioned: “Victims lured into transferring money to nominees”]

The misuse of nominees to open bank accounts is a long-standing tactic favored by criminal organizations, particularly those involved in drug trafficking. However, this practice has recently extended to facilitating financial scams, most notably call-center scams.

Key Features of Nominee Account Usage:

• Irregular transactions
• Inconsistent with the account holder’s age, profession, or location
• Large cash deposits
• Frequent withdrawals followed by deposits

Case Study: Retired Teacher’s Ordeal

[Image of elderly person, captioned: “Retired teacher loses fortune to nominee account scam”]

In one of the most significant cases, a 68-year-old retired teacher lost over 26 million baht after wiring funds to 75 bank accounts across the country. Indicators of nominee account usage include:

1. Suspicious transactions: Transactions inconsistent with the account holder’s age, profession, or location.
2. Large cash deposits: Deposits made from multiple individuals or locations.
3. Frequent withdrawals: Followed by deposits.

Trade-Based Money Laundering

[Image of trading floor, captioned: “International trade provides the perfect cover for money laundering”]

With the boom in international trade, criminals have taken advantage of the complex financial transactions to blur the lines between illicit funds and legitimate business activities. False trade pricing schemes are a common tactic.

Trade-based Money Laundering Techniques:

• Undervaluing exports
• Overvaluing imports
• Using front companies
• Large transactions among companies with the same beneficial owners
• Structuring cash deposits below reporting requirements
• Unusual payment methods

Indicators of Trade-Based Money Laundering

[Image of cash and stacked papers, captioned: “Money laundered through trade operations”]

Some cases have revealed that:

1. Shareholders have connections to or served as nominees for criminal organizations.
2. Beneficial owners are themselves Politically Exposed Persons or associates with corrupt backgrounds.

Indicators of trade-based money laundering include:

1. Transactions involving cash or money orders from unrelated parties.
2. Large incoming wire transfers.
3. Frequent structuring of cash deposits below reporting requirements.
4. Unusual payment methods lacking concern for risks or transaction fees.

Conclusion

[Image of interconnected world, captioned: “Thailand’s financial systems connected to the global economy”]

The use of nominees and trade-based schemes remains a significant concern for financial institutions and law enforcement agencies worldwide. They must adapt to these sophisticated money laundering techniques and address emerging threats like the misuse of new payment methods and increased terrorist financing operations.