#QuickBiteCompliance Day 127
The Truth About Front Companies: When a Business Is Just a Disguise
Imagine a magic trick where a magician makes something disappear—except, instead of a rabbit, it’s dirty money! That’s exactly what criminals do with front companies—businesses that look real but are actually just disguises for illegal money movements.
A front company is a business that seems legitimate, but behind the scenes, it’s controlled by criminals. These businesses might sell super cheap products or services, operate with almost no customers, or even just exist on paper only.
How Do Criminals Use Front Companies?
🔹 Hiding Dirty Money – Criminals mix illegal cash with real business income, making it look clean.
🔹 Selling Below Market Prices – Some front companies sell products at unrealistically low prices to move money undetected.
🔹 Fake Employee Salaries – They pay “salaries” to ghost employees or associates who withdraw the cash and return it to the criminals.
Real-World Example:
A criminal gang might open a restaurant that rarely has customers but reports high sales. Behind the scenes, they are laundering drug money by claiming it comes from food sales.
How Can We Spot and Stop Front Companies?
By using Inclusive Regtech and Open Source AML tools—like those available on Mulai Console—financial institutions can detect unusual transactions, fake employees, and suspicious business activities before criminals get away with their schemes.
The best way to fight financial crime? Make sure every “magic trick” is revealed before criminals disappear with their dirty money.
🔗 Source: ACAMS Glossary of AML Terms
#AML #FinancialCrime #Regtech #InclusiveRegtech #OpenSourceAML #100HariNulis
