STORY MODE EP 1:

Unusual Incoming Transactions & Self-Funding Pattern: A Combined KYC + Transaction Monitoring Investigation

Untamable Chad 😈

…had the best idea ever.

It’s been rough lately, his business partner was breathing down his neck for more profit. That’s all he ever heard lately.

However, it just seemed not possible to squeeze any more out of their business. That’s where that brilliant idea came in - he will just have to be transparent about his tenants.

  1. The rental business is going well, but there are just so many regulations.

  2. To get out of it, he just told his tenants to pay directly to his personal account, NOT the business. He was a private trader after all, wink wink.

  3. It had to be undetected, therefore, no indication it’s rent transfers - no details to show it. He told his tenants exactly what to write.

  4. And he nearly got away from it! Profit from his business, profit from the extra tenants - it was too good to be true.

  5. The bank reached out with a request for clarification on Source of Funds (SoF). Thank God, it was technically legal, just slightly unfair to his business partner. But it was his business too, he had rights!

  6. He did come out of it uncharred. Chad was paying all the taxes he needed to. The documents were there, and providing them to the bank was a piece of cake.

  7. Now he could continue doing this, but it was a close call. His business partner was getting suspicious about the money flow. Better stop while you’re ahead.

John Allseeing 🥸

…just finished working on a rent fraud case.

He doesn’t know if he would have noticed the pattern if he weren’t familiar with it. As he looked through the transactions, he had a weird feeling about them.

It was usual business going through payments with no description. John had to figure it all out by himself lots of times. This case was making him look for clues longer than usual.

  1. The customer was a private trader. Nature of business (96090 - other service activities not elsewhere classified) didn’t give him any hints of the purpose for these transfers.

  2. Looking through registries, John saw no relations between these people. The customer’s ID was verified, no relations in the database, not even the same surname in sight. Why would they send this customer money every month?

  3. Finally, John had something to grasp on - the customer had a business that managed and rented apartments in their own building. Not ideal, but the idea was there.

  4. The addresses matched, counterparties all lived in the same city. The apartment building was registered as one of their previous living address - the pattern of the transactions was pointing in that direction too. It’s all rent transfers.

  5. But why did the customer receive rent to his personal account when his business is the one renting the apartments?

  6. John was already aware that without contact with the customer, the case wouldn’t be clear. There is no indication of taxes being paid, and the business is active, the private trade activities also continue.

  7. At least it’s not a high-risk. Tax evasion is not the fault of the bank, each customer is responsible for doing their own taxes, and if they don’t, they will get fined. Not the bank and definitely not John.

  8. Transfers from business did not look involved in tax evasion - all the transfers were not in round numbers, something was deducted before it landed in the customer’s account.

  9. The pattern indicated it was salary payments. The customer does have to have a main income, at least because he has to get dividends for the ownership of the shares.

  10. This time it’s all good. John will keep an eye out after the customer answers the request for explanation.