How to fight money laundering in your company

people talking about money laundering

Last modified on March 26th, 2024

Thanks to old Hollywood stereotypes, money laundering could be the most famous example of financial crime. But these days, criminals don’t have to ‘clean’ their fraudulent money through a launderette to make it look legitimate. Money laundering cases have risen over the last decade, costing companies more than $800 billion per year. More often than not, they’re directly linked to criminal activities like terrorism or weapon dealing. Learn more about how to combat money laundering activities in your company. Read on to find out what best practices we recommend to fight against fraud and illegal financial transactions.

At Trustpair, we work with large companies to prevent fraudulent payments. With us, money laundering won’t be an option anymore. With all the information you’ll need on a simple dashboard, we save your business from processing suspicious transactions that use laundered money and save time for your finance and treasury department..  Want to get started with Trustpair? Request a demo here.

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What is money laundering and why is it such an issue?

Money laundering refers to the disguise of funds generated by criminal activity. Fraudsters can ‘wash’ the dirty money through a legitimate source to make it seem like the money was generated legally.  Money laundering significantly increased in the last decade, and the cost of compliance has also risen. Large companies filed more than double the number of suspicious activity reports in 2018 compared to 2007

Despite this growth, 41% of financial institutions are still inadequate at meeting anti-money laundering compliance requirements. With the likes of the United States Patriot Act, Bank Secrecy Act, and other anti-money laundering laws (AML), is it any wonder that enterprises are struggling to keep up with the regulators?

There are many different ways fraudsters can launder the proceeds of their crime, which makes it hard to cover all bases. Profits from illegal arms dealing, smuggling, drug trafficking or even terrorism might all have their origins disguised to look like the cash was generated through legal means. This means businesses could be financing unlawful operations without even knowing about it.

However, laundering in a corporate fraud setting is a much more specific case. For example, criminals could commit embezzlement, insider trading, bribery, or invoice fraud.  Let’s say you’re the CEO of a company that sells goods (such as clothing). Without the proper controls in place, criminals could target your company and launder money by over-invoicing you when posing as a supplier. This way, you’re paying for goods and services you had never received.

Even with good internal controls in place, corporate money laundering can happen – and it puts your senior leaders at risk. Not only does money laundering put pressure on your people, but it also exposes your entire supply chain, customers, and vendors. And we all know how much trust and reputation are important in business relationships: having your company involved in money laundering might ruin what you’ve been building for years. 


How does money laundering work at a corporate level?

In most cases, there are three stages: 

  1. Placement
  2. Layering
  3. Integration


The money is ‘cleaned’ through a legal entity by being placed into its financial system. 

Companies that generate more than 100 million in turnover each year are particularly susceptible to placement, as criminals can hide their suspicious transactions in a sea of customer orders. Without monitors for suspicious transaction activities, this can easily fly under the radar. If that’s the case for your company, you should be extra mindful and have the right level of scrutiny.


The money launderer then tries to disguise the source of this new profit to make it appear realistic. This means creating false records, inventive bookkeeping, and the generation of an audit trail. 


The ‘cleaned’ profits from the legit business are reinvested into another source. This moves the money into the wider economy. Once the funds hit a truly legitimate source without criminal links, it’s much harder to discover the money laundering offense. 


What are the ways money can be laundered in your company?

There are a few different money laundering examples on a corporate fraud level. Here are some of the most common: 

Tax evasion 

Individuals like a CEO may launder money to commit tax evasion. Some companies may send a portion of their income through a separate offshore account or shell company in the form of money laundering. It means that it does not show up on transaction records, and they can try to hide it from the IRS when doing a tax return. If caught though, sanctions can include the likes of imprisonment, fines, and other penalties. 

Electronic money laundering

Most corporations need a license to process transactions virtually (like on Apple Pay or Google Pay).

Even with this license, organizations process fraudulent charges, failing to do proper due diligence. Businesses don’t have the tools to discover whether their customers have links to criminal organizations. This places large corporations at a higher level of money laundering risk and attempted fraud.

Invoice fraud

Invoice fraud is one of the most common examples of money laundering at a corporate level. Criminals can impersonate one of your known suppliers by making their own (fake) invoice look realistic. 

Fraudsters can get away with inflated costs, false descriptions, or phantom shipping. Or, they can intercept a legitimate invoice through an email from a supplier and switch the bank details to their own, in a phishing attempt. 

It can be incredibly difficult for United States-based companies to verify the bank accounts of overseas suppliers without investing heavily in their anti-fraud program. Thankfully, Trustpair’s account validation feature can block invoice fraud by using bank data. 

We’re able to identify this information directly to your finance function and set controls in place. This means your suppliers won’t be able to change their bank details without passing an audit check, preventing the likes of invoice fraud. 

How are cryptocurrencies being used in money laundering? 

Risk management practices are few and far between in cryptocurrency transactions. Since the blockchain is a new system based on anonymity, freedom, and governance, controls seem to go against everything crypto stands for. 

However, this means that transactions have a high risk of criminal activity. Cases of money laundering through virtual currencies increased by over 300% between 2018 and 2019, totaling over $2.8 million.  

The problem for accounting managers?

Anyone can open a new wallet without proof of identity. This means criminals can move their crypto through many different accounts in quick succession. Shifting funds through barely regulated exchanges means they can easily conceal their origins. Then, they ‘clean’ the money through a legitimate source. 

And there’s no real way to tell who’s who. 


What are the top ways to prevent money laundering and corporate fraud?

Without a focus on anti-money laundering practices, senior finance leaders expose their enterprises to security breaches, non-compliance fines, and losses in the millions. 

Preventing money laundering should be the top priority for senior financial leaders. 

Comply with regulations

In the United States, we have a really strong anti-money laundering (AML) regulation for regulated financial services companies, overseen by FINRA. AML compliance can look like this: 

  • Building a program to detect and report suspicious activity successfully
  • Creating a risk-based customer identification system
  • Having a qualified designated AML compliance officer

Build a robust due diligence process

Good due diligence is at the heart of anti-money laundering. This means going beyond the standard background checks you should do on your suppliers and customers and enforcing tighter supervision. Working with a platform like Trustpair gives finance execs confidence in their due diligence since the intelligent vendor data management system covers all the relevant authentication details that manual research might miss.  

Plus, by opting for secure payment methods like secure wire transfers, you can ensure that your money only goes to the verified account holder. This lowers the risk of interception and supplier impersonation. 

Back up your security system with software

Upgrade your security so that none of the data you collect can be compromised by criminals or even terrorists. One of the best ways to do this is through specific anti-fraud software, like Trustpair

One of the best features is compliant third-party account validation. This means that, while still complying with law and global regulations, you can manage third-party risks through the most in-depth background checking. At Trustpair, this works by streamlining several external and internal international databases to eliminate the risk associated when working with a new supplier. Our solution constantly monitors bank account information to detect any suspicious status change or activity relating to third parties. Unlawful transactions are blocked, eliminating the risk of money laundering and scams.

Using this feature on potential partners means that you can be confident in your risk assessment. Plus, you’ll reveal any suspicious relationships involving people you intend to do business with and have access to detailed reporting relating to fraud monitoring.

The importance of combating money laundering

Here’s the thing about money laundering: funds are only recovered 0.1% of the time for US-based companies. It means that active prevention – even in the case of the smallest suspicion –  is key because if you fall victim to money laundering, you’re unlikely to get your money back.    On top of that, money laundering has strong links to illegal activities that endanger human lives: crime, terrorism, drugs… Not complying with AML regulations can make your business complicit in these violations and greatly impact your reputation and activity. Not only is it a federal offense, but it’s also an ethical one that customers, investors, and partners might not forgive once it’s discovered.

To give your firm best-in-class support against corporate fraud, choose Trustpair. By removing the risk of fraud, our clients have retained over $60 million and benefit from better relationships with their suppliers with a sleek payment process. Save your funds and avoid funding illegal activities and terrorism!

Prevent money laundering fraud with Trustpair’s financial intelligence platform. 

demo request trustpair b2b payment prevention plateform


If concealed well, it can be really hard to find a paper trail for money laundering. The biggest thing to look for is a clean audit trail for past payments and the verification of goods received. 

KYC refers to Know Your Customer. This is a regulatory requirement for some financial institutions, referring to the background checks that companies must do on customers. 


The overall goal of KYC fits with the general anti-money laundering definition: it aims to verify the identity of customers and reveal their connections to other suspicious sources.

Money laundering has three main stages: placement, layering, and integration. Initially, illicit funds are introduced into the financial system during the placement stage. Following this, the layering stage obscures the funds’ origins through complex financial transactions and movements across accounts and borders. Finally, integration sees the laundered money re-entering the economy as seemingly legitimate assets or purchases. Understanding these stages is pivotal for finance professionals to detect and prevent the laundering of illicit funds effectively.

Our software operates in Europe and the United States. We automatically control financial information and transactions, detecting any anomaly in bank accounts – domestic and foreign – or activity. This means you know who you’re sending cash to at any given time and can make sure you aren’t committing any federal offense without knowing or financing crime or terrorism. Each transfer is secure and within the AML regulation enforcement.

It also means your cash and corporate property are safe and not in the hands of scammers, which leaves more room for strategic investments and spending.

On top of that, our international solution will help your business be more efficient and the financial department – treasury, accounting, etc – gain time and peace of mind. Transactions and bank information are automatically monitored, without any need for manual and time-consuming processes. We also provide extensive reporting around third-party risks.

Manage the risks related to corporate treasury.

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