A

Account Activity Inconsistent with Customer Profile

Transaction patterns, volumes, or frequencies that deviate significantly from the expected behavior based on the customer's stated business, occupation, or financial profile. This may include unusual spikes in activity or transactions that don't align with the customer's declared purpose for the account.

Account Dormancy Followed by Large Transactions

A previously inactive account that suddenly shows significant activity, particularly large deposits or withdrawals. Money launderers may establish dormant accounts and later activate them for illicit funds movement when they believe they are under less scrutiny.

Adverse Media Mentions

News or information from credible sources connecting a customer or counterparty to criminal activities, regulatory violations, or financial misconduct. This includes mentions in reputable newspapers, government announcements, or reliable online sources about fraud, corruption, money laundering, or other financial crimes.

Atypical or Uneconomical Wire Transfer Patterns

Wire transfers that lack logical business purpose or economic justification, particularly those sent to multiple recipients followed by rapid withdrawals, or those with unusual routing through multiple institutions or jurisdictions. May indicate attempts to layer transactions to obscure the source of funds.

B

Beneficial Ownership Concerns

Signs that the stated beneficial owner may not be the actual controlling individual, including reluctance to provide ownership information, complex ownership structures without clear business purpose, frequent changes in ownership documentation, or beneficial owners who appear to be nominees (individuals acting on behalf of undisclosed parties).

Bulk Cash Movements

Large physical cash deposits or withdrawals, particularly when conducted frequently or by third parties, or moving in or out of multiple branches or locations. Drug trafficking and other criminal enterprises often generate large volumes of cash that must enter the financial system.

Business Activities in High-Risk Jurisdictions

Customers conducting substantial business in countries identified as having strategic deficiencies in anti-money laundering and counter-terrorist financing regimes, significant levels of corruption, active terrorist organizations, or subject to international sanctions. These connections may require enhanced scrutiny and due diligence.

C

Cash-Intensive Business Anomalies

Unusual cash transaction patterns in businesses typically expected to handle significant cash (restaurants, retail stores, parking facilities), such as deposits inconsistent with reported business volume, dramatic increases in cash flows without explanation, or deposits containing unusual denominations (excessive small bills or lack of small bills).

Complex Corporate Structures

Unnecessarily complicated ownership structures involving multiple layers of companies, offshore entities, shell companies, or trusts without clear legitimate business purpose. Such structures may be designed to obscure beneficial ownership, evade taxes, or hide the source or destination of funds.

Correspondent Banking Red Flags

Suspicious activities in correspondent banking relationships, including transactions with shell banks, nested correspondent relationships (downstream clearing), respondent banks with inadequate AML controls, or unusually large volumes of transactions with high-risk jurisdictions through correspondent accounts.

Currency Transaction Structured to Avoid Reporting

Multiple cash transactions conducted in amounts just below reporting thresholds (e.g., slightly under $10,000 in the US), especially when performed over a short period, by related individuals, or at different branches. This deliberate "structuring" is designed to evade mandatory cash transaction reporting requirements.

Cryptocurrency Red Flags

Suspicious activities involving virtual currencies, including transactions with cryptocurrency mixing/tumbling services, connections to darknet markets, use of privacy coins, rapid conversion between multiple cryptocurrencies, or cryptocurrency transactions from/to high-risk exchanges with weak KYC controls.

D

Deliberate Avoidance of Contact or Meetings

Customers who consistently refuse in-person meetings, provide only third-party contacts, communicate exclusively through intermediaries, or are otherwise unusually secretive about their activities. This behavior may indicate attempts to avoid identification or scrutiny of the true parties involved in transactions.

Discrepancies in Documentation

Inconsistencies or irregularities in customer documentation, including mismatches between transaction details and supporting documents, alterations in trade documents, multiple invoices for the same shipment, or significant value discrepancies between invoices and fair market value of goods or services.

Dual-Use Goods Transactions

Activities involving goods that have both commercial and potential military applications, particularly when shipping routes are unusual, end-users are unclear, delivery addresses differ from the stated business location, or transactions involve parties near sanctioned jurisdictions. May indicate sanctions evasion or proliferation financing.

E

Early Loan Repayments with Unexplained Source of Funds

Loans that are unexpectedly repaid ahead of schedule, particularly when the source of funds is unclear, inconsistent with the customer's financial profile, or comes from unrelated third parties. Money launderers may obtain legitimate loans and repay them with illicit funds to create an appearance of legitimate wealth.

Electronic Fund Transfer Irregularities

Suspicious patterns in electronic transfers, including transfers with incomplete or inconsistent information, unusual sender/recipient relationships, transfers with no apparent economic purpose, or payments routed through multiple institutions or jurisdictions to obscure their origin or destination.

Excessive Use of Cash Equivalents

Unusual volumes of transactions using monetary instruments like money orders, traveler's checks, or prepaid cards, particularly when purchased with cash, in sequential numbering, or in amounts just below reporting thresholds. These instruments can be used to convert cash into more portable and less traceable forms.

F

False or Inconsistent Customer Information

Discrepancies in customer-provided details, including identification documents with signs of alteration, addresses that appear to be mail drops or don't match identification, inconsistent signatures, or information that cannot be verified through reliable sources. May indicate attempts to conceal true identity or activities.

Frequent Address or Phone Number Changes

Customers who regularly modify their contact information without reasonable explanation, particularly those who provide temporary addresses, frequently change phone numbers, or use multiple email accounts. This behavior may represent attempts to avoid detection or communication from authorities.

Funnel Account Activity

Multiple individuals making deposits (often cash) into a single account in various geographic locations, followed by the consolidated funds being withdrawn elsewhere, typically in a high-risk region or border area. This pattern is frequently associated with drug trafficking organizations moving proceeds across jurisdictions.

G

Geographical Risk Indicators

Transactions or business relationships connected to jurisdictions with significant money laundering concerns, high corruption scores, known terrorist activity, inadequate financial regulations, bank secrecy laws, or tax havens with minimal transparency requirements. Such jurisdictions may be identified by FATF, international organizations, or national authorities.

Gift or Donation Irregularities

Suspicious patterns in charitable donations or gifts, including large anonymous donations, multiple small donations aggregating to significant amounts, donations from or to high-risk jurisdictions, or charities with minimal operational presence. Terrorist organizations sometimes use legitimate-appearing charities as funding channels.

H

High-Value Asset Purchases with Cash

Acquisitions of luxury items, real estate, vehicles, art, or other valuable assets using large amounts of cash or cash equivalents, particularly when the buyer's financial profile doesn't support such purchases or when third parties are involved in the transaction. These purchases may represent efforts to convert illicit cash into less suspicious assets.

Human Trafficking Indicators

Financial patterns suggestive of human trafficking or smuggling, including multiple individuals making deposits into a single account, excessive payments to travel agencies or accommodation services, after-hours ATM activity, or accounts receiving multiple small deposits and immediately transferring funds elsewhere. May also include unusual business expenses inconsistent with stated operations.

I

Insufficient Business Purpose for Transactions

Financial activities that lack clear economic justification or appear unrelated to the customer's stated business or objectives. This includes transactions significantly larger than typical for the business, international transfers unrelated to the customer's trading patterns, or complex transaction structures where simpler methods would be more economical.

Insurance Product Red Flags

Suspicious insurance transactions, including early policy cancellations with requests for cash or wire transfers, purchasing policies inconsistent with the client's needs, overpayment of premiums followed by refund requests, or using insurance products as investment vehicles with minimal insurance value. Insurance products can be misused in the layering and integration stages of money laundering.

Involvement of High-Risk Business Types

Entities operating in sectors associated with elevated financial crime risks, including cash-intensive businesses (casinos, car washes, convenience stores), dealers in high-value goods (art, precious metals, luxury cars), professional service providers often used in complex structures (certain law firms, company formation agents), or businesses with minimal physical presence relative to transaction volume.

J

Joint Account Anomalies

Suspicious patterns in jointly held accounts, including accounts where signatories appear unrelated with no clear relationship, accounts where one party appears to exercise exclusive control despite joint ownership, or accounts where elderly or vulnerable individuals are added as co-owners followed by unusual withdrawals. May indicate attempts to gain control of others' funds or create plausible deniability.

Jurisdictional Arbitrage Attempts

Deliberate structuring of transactions or business relationships to exploit differences in regulatory requirements between jurisdictions, including routing transactions through countries with weaker AML/CFT controls, establishing entities in secrecy havens, or segmenting financial activities across multiple jurisdictions to avoid comprehensive oversight.

K

KYC Documentation Issues

Problems with Know Your Customer documentation, including reluctance to provide required information, submission of apparently altered documents, inconsistencies between provided documents and external data sources, or unexplained delays in providing requested verification materials.

Knowledge Gaps About Source of Funds

Customer inability or unwillingness to provide clear, consistent information about the origin of substantial funds when requested, particularly for large transactions, account openings with significant initial deposits, or when the stated source seems inconsistent with the customer's profile or transaction history.

L

Layering Transaction Patterns

Complex sequences of financial movements designed to obscure the original source of funds, including multiple transfers between accounts (especially across institutions or borders), conversion between different asset types (currency, securities, virtual assets), or rapid movement of funds without clear business purpose. This is a key stage in the money laundering process.

Legal Entity Red Flags

Suspicious characteristics of corporate customers, including recently formed companies conducting substantial transactions inconsistent with typical startup operations, entities with minimal documentation of business activities, companies with registered addresses that are mail drops or virtual offices, or entities with directors/officers who appear to lack relevant experience or knowledge of the business.

Loan-Back Arrangements

Transactions where funds are sent to an offshore entity or individual and then returned as a "loan" to the originator or related party. These arrangements may be used to disguise the source of funds, create seemingly legitimate income streams, or achieve tax evasion by converting taxable income into non-taxable loan proceeds.

M

Money Service Business Concerns

Suspicious activities involving money transmitters, currency exchanges, or other non-bank financial services, including transactions lacking expected identification records, unusual patterns of cross-border transfers through MSBs, structured transactions through multiple MSB locations, or MSBs operating without appropriate licenses or registrations.

Multiple Transaction Channels

Use of various financial platforms, products, or services to conduct what appears to be related business, particularly when channels seem unnecessarily diverse or complex for the stated purpose. This may include dividing transactions across multiple banks, mixing traditional and digital financial services, or using both regulated and less-regulated channels.

Multiple Related Accounts

Maintaining numerous accounts for no apparent legitimate business purpose, especially when these accounts involve the same beneficial owners, related parties, or show frequent transfers between them. This pattern may be used to compartmentalize activities, obscure transaction flows, or prepare multiple channels for structuring transactions.

N

Name Variations to Evade Screening

Deliberate alterations in spelling, formatting, or presentation of names to circumvent sanctions screening or watchlist matching. This may include inconsistent use of middle names, titles, or suffixes, unusual spacing or punctuation in names, or transposing name elements to avoid automated detection systems.

Nominee Usage Indicators

Signs that individuals are acting as proxies or front persons for undisclosed parties, including persons who appear uninformed about transactions they are conducting, individuals conducting transactions on behalf of others without formal authorization, or authorized parties who defer all questions to third parties not officially connected to the account.

Non-Profit Organization Risk Indicators

Suspicious activities in charitable organizations, including mismatches between stated purpose and actual activities, unusual international funds transfers to high-risk regions, limited transparency about fund usage or governance, or financial activities inconsistent with the organization's mission. Terrorist groups may misuse legitimate NPOs or create front charities to move funds.

O

Offshore Structure Utilization

Use of entities or accounts in offshore financial centers, particularly when the business purpose is unclear, structures are unnecessarily complex, jurisdictions have minimal transparency requirements, or there is no evident connection between the offshore location and the customer's residence or business operations.

Overpayments and Refund Requests

Transactions where customers make payments exceeding the required amount (for goods, services, or debts), followed by requests to refund the excess to a different account or payment method than the original. This technique can be used to create a seemingly legitimate source for funds that are actually returned to the launderer.

Over/Under-Invoicing in Trade

International trade transactions where the stated price for goods or services differs significantly from market value, including invoices showing prices much higher or lower than expected. This trade-based money laundering technique can transfer value across borders by manipulating transaction documents rather than physically moving currency.

P

Politically Exposed Person Concerns

Unusual financial activities involving PEPs or their close associates, including unexplained wealth inconsistent with known income sources, complex ownership structures obscuring connections to political figures, transactions with government contractors or entities receiving public funds, or financial activities linked to regions where the PEP has influence or authority.

Payment Sequencing Anomalies

Unusual patterns in the timing, frequency, or structure of payments, including regular round-number transfers that follow predictable patterns, multiple small payments aggregating to significant amounts, or transactions conducted outside normal business hours or on regular schedules unrelated to business cycles.

Phantom Shipment Indicators

Signs that international trade transactions may involve non-existent or misrepresented goods, including missing or inadequate shipping documentation, discrepancies between shipping records and financial flows, multiple invoicing for the same shipment, or trade in goods that seem inconsistent with the business profile of the parties involved.

Property Transaction Red Flags

Suspicious real estate activities, including property purchases at prices significantly above or below market value, frequent property flipping without apparent improvements, use of shell companies or third parties to obscure ownership, cash-intensive real estate transactions, or purchases made without inspection or apparent interest in property characteristics.

R

Round-Number Transactions

Frequent transfers in neat, whole amounts (such as exactly $5,000 or $10,000) that are uncharacteristic of legitimate business transactions, which typically involve more specific amounts. This pattern may indicate artificial or predetermined transaction values rather than genuine commercial activities.

Rapid Movement of Funds

Funds that move quickly through accounts with minimal holding time ("in-and-out" transactions), particularly when transfers occur between different financial institutions, jurisdictions, or entity types. This behavior may indicate attempts to create confusion about the funds' origin or to stay ahead of detection systems.

Related Party Transaction Concerns

Business transactions between connected entities that appear to lack economic substance or fair market pricing, including circular transactions, apparent self-dealing, unusual loan arrangements between related parties, or transactions where the relationship between parties is concealed or unclear. May be used to create artificial transaction records.

S

Sanctions Evasion Techniques

Activities designed to circumvent sanctions controls, including use of intermediaries or front companies to conceal the involvement of sanctioned parties, omitting or altering key information in transaction details, using indirect payment paths through non-sanctioned jurisdictions, or transactions with parties in close geographical proximity to sanctioned regions.

Shell Company Warning Signs

Indicators that an entity may be a shell company with no substantive operations, including minimal staff, shared address with numerous other entities, limited online presence or physical footprint, generic business descriptions, officers serving multiple unrelated companies, or high-value transactions shortly after formation.

Smurfing/Structuring Patterns

Deliberate division of large transactions into multiple smaller transactions to evade reporting thresholds or attract less scrutiny. Indicators include multiple transactions just below reporting limits, transactions conducted by multiple individuals for the same beneficiary, or similar transactions conducted across different branches or institutions within a short timeframe.

Source of Wealth Inconsistencies

Discrepancies between a customer's financial activity and their stated or apparent income sources, including lifestyle or transaction values disproportionate to declared occupation, claims of wealth from vague or unverifiable sources, or sudden unexplained increases in financial capacity without corresponding legitimate explanation.

Suspicious Use of Professional Services

Concerning patterns in the use of lawyers, accountants, or other professionals, including professionals who appear to act beyond normal service boundaries, reluctance to identify clients when professional privilege is not at issue, or involvement in transactions where the professional's expertise seems unnecessary or their role is primarily to provide an appearance of legitimacy.

T

Tax Evasion Indicators

Financial activities suggesting potential tax avoidance or evasion, including unexplained wire transfers to known tax havens, complex cross-border structures without clear business purpose, transactions designed to artificially reduce reportable income, or discrepancies between reported business activity and observed financial flows.

Terrorist Financing Red Flags

Transaction patterns associated with funding terrorist activities, including transactions with regions known for terrorist activity, unusual fund transfers to charities or NPOs operating in conflict zones, multiple small value transfers that aggregate to significant amounts, or transactions involving individuals associated with extremist groups or ideology.

Third-Party Payments

Funds transfers where the originator or beneficiary appears unrelated to the customer without clear explanation, including payments from or to parties not involved in the stated transaction, settlement of obligations through unrelated third parties, or routing of funds through seemingly unconnected individuals or entities.

Trade Document Discrepancies

Inconsistencies in international trade documentation, including mismatches between shipping records and payment information, altered or potentially counterfeit trade documents, descriptions of goods that appear vague or misclassified, or shipping routes that seem unnecessarily complex or economically irrational.

Transaction Amounts Inconsistent with Purpose

Financial activities where the value seems misaligned with the stated purpose, including payments significantly larger than typical for the declared goods or services, unexplained size disparities in recurring transactions, or funds transfers that seem disproportionate to the economic capacity of the parties involved.

U

Unexplained Cash Deposits

Cash deposits without reasonable explanation of source, particularly when large, frequent, or inconsistent with the customer's profile. This includes cash transactions in businesses not typically cash-intensive, deposits in multiple branch locations, or cash deposits immediately followed by transfers to seemingly unrelated parties.

Unusual Account Activity

Transaction patterns that deviate from the customer's established history or expected activity, including sudden increases in transaction frequency or value, activity inconsistent with the stated purpose of the account, unexpected international transactions, or significant changes in transaction types without apparent business rationale.

Use of Concentration Accounts

Suspicious use of pooled or omnibus accounts that combine funds from multiple sources before distribution, particularly when individual client details are obscured, commingled funds remain in concentration accounts for extended periods, or when the financial institution lacks robust controls to track the origin and destination of funds flowing through these accounts.

V

Value Transfer Without Financial Movement

Methods of transferring economic value without corresponding movement of funds through formal financial channels, including invoice manipulation, phantom service charges, intellectual property fee arrangements, or offsetting transactions between related parties. These techniques can transfer value while minimizing detectable financial flows.

Virtual Asset Red Flags

Suspicious activities involving cryptocurrencies and other digital assets, including transactions with high-risk exchanges or unregulated platforms, use of privacy-enhancing technologies (mixers, tumblers, privacy coins), transfers to/from darknet marketplaces, or attempts to convert between virtual assets and cash with minimal documentation.

Vague or Generic Transaction Purposes

Payment descriptions that lack specificity or appear deliberately ambiguous, including transfers labeled with generic terms like "payment," "invoice," "services," or "consulting fee" without further details, particularly for significant amounts or international transactions where regulatory expectations require more specific purpose information.

W

Wealth Management Red Flags

Suspicious activities in private banking or wealth management relationships, including reluctance to provide source of wealth documentation, clients directing transactions through private bankers rather than directly, requests for unusual levels of confidentiality, or complex trust or corporate structures to hold personal assets without clear estate planning or tax efficiency rationale.

Wire Stripping or Manipulation

Deliberate removal or alteration of key information in payment messages to conceal the involvement of sanctioned parties or high-risk jurisdictions. This includes omitting originator or beneficiary details, using abbreviated or coded references, or replacing specific party names with vague descriptions to avoid sanctions screening systems.

Wildlife and Environmental Crime Indicators

Financial patterns associated with environmental crimes, including transactions involving businesses in regions known for illegal logging, mining, or wildlife trafficking; payments to freight forwarders or shipping companies from high-risk countries for environmental crime; or transactions involving parties previously linked to environmental offenses.

Financial Crime Compliance Red Flag Glossary

A