FCA 102 - AML Assignment 1

- Research

Submitted by: Viraj Joshi (ID: 148385206)

Course code: FCA 102

Due date: 26th November 2021

Professor: Daniel Bowering

 Introduction

This article refers to a money laundering instance that took place in Italy and Spain

where the organized crime group were involved in online fraud, money laundering,

drug trafficking and property crime. Over a 100 people were arrested on various

charges listed above of defrauding victims through phishing, business email

hackings etc. and using human mules and various shell companies to launder the

money received from the fraudulent activities. The proceeds of these serious crimes

were totaling 10 million euros of fraud activities and duping more than 100

individuals.

The reason of picking this article was to establish how online frauds have become

prevalent in this age of technology. It has become increasingly easy to defraud

innocent people with lack of digital and financial literacy. Such victims of fraud are a

weapon for money laundering activities through various schemes and tricks.

The investigation in the matter began in June 2020 when the Spanish Police started

looking at close ties of the organized crime group to the Italian mafia clans in Spain.

The group tricked and manipulated victims of transferring large sums of money into

multiple bank accounts they controlled and operated for illicit activities.

Summary

A group of 100 people were arrested in Spain and Italy following a series of sting

operations and joint investigations between Italy and Spain in the matter of money

laundering. The operation was to bring down an Italian mafia gang operating out of a

Spanish Island of Tenerife who were responsible for laundering upwards of 10

million euros from their victims. Europol supported operation found over 100 people
guilty of fraud, drug trafficking, money laundering, kidnapping, robbery, and illegal

possession of weapons. The group defrauded victims by tricking them into wiring

large sums of deposits into the bank accounts primarily used for laundering. They

also laundered the money through various cryptocurrencies or reinvested the money

in criminal operations like prostitution, drugs, and arms trafficking. The primary

source fraud was online phishing attacks and various other online scams like SIM

swapping and business email hacking to extract sensitive data. The Police was

involved in tracking down these scammers with an operation to raid 18 houses,

freezing 118 bank accounts and seizing dozens of electronic devices and credit

cards. Europol suggested that the scam was a classic pyramid structure scheme of

defrauding their victims.

The investigation in this group began in June 2020 where the Spanish police found

links through their investigations into a group Italian Mafia operating out of Tenerife

Island in Spain. The scam was conducted in various European countries like

Germany, Lithuania, Ireland, UK etc. through various computer crimes and to

launder the proceeds from such crimes. One of the instances where a woman was

forced at gunpoint to steal money from one of their operated bank accounts and was

also forced to open 50 bank accounts and that is when it caught the attention of the

authorities of sheer volume of bank accounts opened by one individual. The illegal

proceeds to the crimes were laundered through an extensive network of human

mules and various shell companies.

Topic Analysis

1. Scammers forced their victims to deposit large sums of money in various bank

accounts they primarily operated to wash dirty money to clean money. The
 proceeds were then used to buy cryptocurrencies and for reinvestment in

other criminal activities. Buying cryptocurrencies masked its source of funding

and entered the financial system.

2. They also forced a woman to open 50 bank accounts for them to launder

money through these bank accounts. They also resorted to violence in this

case. The woman was eventually arrested on suspicion of money laundering.

3. They were accused of laundering 10 million euros. The frauds happened

through a criminal network in a classic pyramid structure where each of those

individuals had expertise in specialized areas ranging from technology,

finance, extortion, and other violent actions.

Suspicious Transaction Report Submission

Assumptions:

The transactions involved were through various bank accounts and occurred at the

time when the article was published. Conversion of funds into a cryptocurrency

wallet was carried out regularly. The cash transactions were also conducted between

the mafia group’s shell company accounts.

Part G

1. Seizure of electronic devices, 224 credit cards, SIM cards, POS terminals.

118 bank accounts connected to the mafia group in various countries.

Marijuana plantations and equipment to grow and distribute were seized.

2. Proceeds of crimes used to purchase cryptocurrency made its source of

funding obscured.
3. Arrest of a victim who opened 50 bank accounts to launder money for the

mafia group under an imminent threat.

4. Transactions linked from innocent victims of fraud to the various shell

companies that are not ordinarily related.

Part H

1. All accounts which were involved in suspicious transactions will be frozen until

further notice. All funds will be frozen.

2. Guilty parties will be subject to criminal and civil liabilities.

 Citations

Over 100 Arrested in Spain and Italy in Major Money-Laundering Sting.” Euronews,

20 Sept. 2021, www.euronews.com/2021/09/20/over-100-arrested-in-spain-and-italy-

in-major-money-laundering-sting

“Europol Busts Major Crime Ring, Arrests Over 100 Online Fraudsters.” The Hacker

News, 22 Sept. 2021, thehackernews.com/2021/09/europol-busts-major-cybercrime-

ring.html

Financial Transactions and Reports Analysis Centre of Canada. “Reporting

Suspicious Transactions to FINTRAC.” Financial Transactions and Reports Analysis

Centre of Canada, 12 Aug. 2021, www.fintrac-canafe.gc.ca/guidance-

directives/transaction-operation/Guide3/str-eng

Financial Transactions and Reports Analysis Centre of Canada. “What Is a

Suspicious Transaction Report?” Financial Transactions and Reports Analysis

Centre of Canada, 12 Aug. 2021, www.fintrac-canafe.gc.ca/guidance-

directives/transaction-operation/Guide2/2-eng