Harrisburg woman pleads guilty to laundering proceeds of $390,000 email fraud against a municipality

Why it matters to AML professionals

Business email compromise schemes depend on accounts that can receive a large payment and move it on quickly. Shell companies opened in a real person's name give those accounts a business look that can pass basic checks. AML professionals reviewing small business accounts should compare the stated business with the actual payment flows from the first months of the relationship.

Red flags in this case

• A newly opened business account receives large wires from a government body or public entity with no visible service relationship
• Incoming funds are sent out to other accounts within days, leaving little balance
• The business shows no ordinary operating expenses such as payroll, suppliers, equipment or rent
• The account holder appears to act for a third party who directs the opening of accounts and the movement of funds

If this landed in your queue

1. Check whether the business's stated activity matches its counterparties and the size of incoming payments
2. Contact the sending bank or payer, where policy allows, to confirm whether a large incoming wire is legitimate before releasing funds
3. Trace where outgoing funds went and look for links to other accounts that received similar wires
4. File a suspicious activity report describing the pass-through pattern and any signs the customer acts for someone else

Key terms

Business email compromise (BEC)

A fraud in which criminals impersonate a supplier, executive or official by email to trick a victim into sending money to accounts they control.

Shell company

A company that exists on paper but has no real business operations, often used to hide who controls money.

Money mule

A person who receives and moves criminal proceeds through their own or their company's accounts, knowingly or not.

Interview angle

A new small business account receives a large wire from a local government body and sends most of it out within two days. What do you do?

Explain that you would compare the payment with the stated business, look for missing operating costs, check the beneficiaries of the outgoing payments, consider contacting the payer to confirm the wire, and escalate for a suspicious activity report if the pass-through pattern has no clear business reason.