TheCorner stoneReport

Safeguarding America through 

Financial Investigations 

www.ice.gov/cornerstone 

Toll-Free Tip Line: 

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE) 

comprehensive investigative initiative 

for fighting financial crime. 

The Cornerstone Report is a quarterly 

bulletin highlighting key issues 

related to ICE financial, narcotics and 

public safety investigations. 

June 2009 

International Spotlight

on the Netherlands 

Special 

Edition 

U.S.Immigration and 

Customs Enforcement 

(ICE) participates frequently in the 

U.S. Department of State International Visitors Leadership Program 

(IVLP) to show international guests 

the ins and outs of the agency’s 

daily work.The IVLP invites foreign 

government participants to the 

United States to strengthen relationships, enabling them to get to know 

counterparts in the United States 

and learn about American culture 

as a whole. 

Recently, Anne-Chris Visser, senior 

coordinating policy advisor for the 

Netherlands Ministry of Finance, 

visited ICE in Washington D.C. Her 

main responsibilities are developing 

policy regarding anti-money laundering and counterterrorism financing in the Financial Action Task 

Force and financial countermeasures, like designations and freezing 

of assets. She met with ICE Special 

Agent Kevin Tyrrell from the Financial Programs/Cornerstone Unit at 

ICE headquarters. As it turned out, 

there are a lot of similarities 

between the United States and the 

Netherlands in the risks, vulnerabilities and trends in money laundering. One striking example is the 

exploitation of money service businesses for money laundering. For 

the Cornerstone Report, Ms.Visser 

wrote a contribution about the 

risks and vulnerabilities of money 

service businesses.The contribution 

represents her personal view only. 

Walking a Fine Line: 

Regulation and Enforcement 

of Money Service Businesses 

“The chain is as strong as the 

weakest link. A key element for 

successful Anti-Money LaunderingCombating the Financing of Terrorism (AML-CFT) regime is cooperation between the public and private 

sectors. It is a complete joint exercise of the private sector and public 

sector together.The role of the 

Financial Intelligence Unit (FIU) is 

vital in this joint exercise to ensure 

the quality of the data through analyzing of available information.” 

– Anne-Chris Visser, 

senior coordinating policy advisor, 

Ministry of Finance of the Netherlands 

The X Factor: The Attractiveness 

of Money Transfer Businesses 

Using money transfer businesses 

(regulated or unregulated) enables a 

client to send money to the far end 

of the world, where it arrives 

within minutes, without going 

through elaborative administrative 

requirements.These transfers are 

based on mutual trust between 

the sender and the receiver. An 
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60

50

40

30

20

10

0

Effects of Dutch Regulation on Number of Money Services Businesses 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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June 2009 

Special Edition 

important element 

in the attractiveness 

of the money transfer businesses is the 

fact that the transfers reach the most 

remote places, 

where no financial 

structure exists. 

One important legitimate function 

of money transfer businesses is 

that immigrants worldwide rely 

on them for the financial support 

of family abroad. Unfortunately, 

the attractiveness of the money 

transfer businesses has also been 

discovered by criminals. They benefit from the speed in transferring 

money and the limited traceability 

of the originator and the receiver 

of the transfer. 

Corner

Facts and Findings of the 

Dutch Regulation on Money 

Transfer Businesses 

In the Netherlands, the first specific 

legislation on money transfer businesses dates from 1995. Before 

1995, money transfer businesses 

fell under the scope of a general 

prohibition without a banking 

license.The money transfer business 

provided a growing niche market, 

so more money exchange offices 

and money transfer businesses 

were established. One important 

factor of the growth of the money 

transfer businesses is immigration 

and the desire to support family 

members abroad. 

However, already in 1995 it was 

clear from law enforcement investigations that in drug related and 

money laundering cases, both 

money exchange and money transfer businesses were frequently used 

to transfer money. From that 

moment onwards, legislation and 

AML-CFT supervision for money 

exchange and money transfer businesses were introduced. 

After the terrorist attacks of 2001, 

the legislation for money transfer 

businesses was strengthened and a 

new act on money services businesses came into force on July 19, 

2002. The stringent new legislation 

resulted in a considerable decrease 

in the number of providers, as 

shown by the chart above. 

The risk of such a significant 

decrease in providers is that the 

providers might continue to offer 

their services, but without a license, 

essentially transforming themselves 

into an underground banking system. Close cooperation between law 

enforcement and financial supervisors ensured that previously 

licensed providers did indeed withdraw from the market. 

Further amendments to the legislation are on the way. To promote 

an open European integrated financial market, the member states 

of the European Union drafted, 

with the European Commission, 

the Payment Service Directive 

(PSD). This legislation enables 

payment service providers, like 

money transfer businesses, to 

use similar payment structures. 

To implement the PSD, our national 

legislation will be amended, especially in relation to the licensing 

requirements.The new legislation 

is planned to come into force on 

November 1, 2009. 

Some Facts and Findings 

Regarding Regulation and 

Law Enforcement 

The following is a short overview 

of the current requirements that 

money transfer businesses have to 

comply with in the Netherlands. 

This is simply an introduction; it is 

not meant to serve as a complete 

detailed description of the supervision and law enforcement of money 

service businesses. 

Pursuant to their licensing legislation, money transfer businesses 

are obliged to maintain a full internal administrative and organizational procedure handbook to 

ensure the integrity requirements 

of their offices and employees. 

Examples of these requirements 

are, among others, a fit and proper 

test for the owner and the person 

in charge of setting the policy, an 

accountancy report by a separate 

accountant and a strict division 

between working with the clients 

and the handling of settlement and 

cashier functions. 
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On the basis of the 

Corner

Dutch AML-CFT 

legislation, money 

transfer businesses 

are obliged to identify each and every 

client (natural person and if it concerns a legal person, 

the beneficial owner 

of the legal entity), regardless of the 

size of the transaction.The records 

of the identification have to be kept 

for five years. Furthermore, the 

money transfer businesses are 

required to report each transfer of 

2,000 euros and above to the 

Case Examples 

Case examples derive from the Financial Action 

Task Force (FATF) "Money Laundering and Terrorist Financing Typologies, 2004-2005" report and 

from our contribution to the 2009 typology study 

of money service businesses. These documents 

and more information on typologies and risk indicators are available at the FATF Web site at 

www.fatf-gafi.org. 

Case Example: 2004-2005 

A major human trafficking and money laundering 

case in the Netherlands began with suspicious 

transaction reports concerning transactions at a 

Hong Kong bank in which large amounts of cash 

were deposited into accounts and immediately 

followed by outward remittances into a personal 

account in the Netherlands. Following the suspicious transaction reports (STRs) (in 1999), the 

FIU launched an investigation into the account of 

Z., the head of a dismantled alien smuggling 

organization in the Netherlands, from which an 

address in the Netherlands was established. 

The Hong Kong FIU contacted the Netherlands 

National Police Agency for background inquiries 

and was told that the agency had already started 

an investigation into Z.’s syndicate involving 

human trafficking. She coordinated with her 

accomplices for the purpose of smuggling mainland Chinese through Russia, Ukraine, Turkey and 

Slovakia into Western Europe. The final destinations were Canada, the United States and Mexico. 

The Hong Kong FIU identified five accounts held 

by Z., with a total amount of $283,000 USD. The 

information was passed to overseas counterpart 

agencies. Throughout the period, the FIU continued to monitor the cash flows and the updated 

balance amounted to over 2 million euros. To 

Financial Intelligence Unit Netherlands (FIU NL). Even though these 

transactions are not necessarily suspicious, through analyzing and 

matching the information with 

other existing information in the 

FIU NL, the Dutch have discovered 

interesting patterns in criminal 

activity. The information has proven 

to be very useful to law enforcement. Finally, money transfer businesses are also obliged to report 

unusual transactions below the 

threshold when they have reason 

to believe that the transaction could 

be related to money laundering 

or terrorist financing. 

avoid suspicion, Z. appeared to use several bank 

accounts in various countries in her own name or 

in the name of facilitators to hide and launder 

the illegal proceeds. Funds were wire transferred 

to foreign accounts. The investigation by the 

Hong Kong, FIU revealed that Z. had also triggered 8 STRs for purchasing casino chips with 

both Dutch and foreign currencies (cash) in a 

state-run casino. 

Z. was arrested in the Netherlands in June 

2000 and convicted in October 2003. She 

was sentenced to three years and six months 

imprisonment. In January 2004, a Dutch court 

made a confiscation order for 8.7 million euros, 

representing unlawful gains. Overseas police 

agencies also arrested several persons abroad 

and seized assets, including real estate and 

accounts situated in foreign countries. 

Case Examples: 2005-2006 

The two cases mentioned below provide a good 

example of successful cooperation between regulatory and law enforcement agencies: 

• The Dutch Central Bank discovered counterfeiting of identity papers and transaction 

reports at two money transaction offices (who 

were competitors) and filed police reports, 

which led to further investigations by law 

enforcement agencies. In the end, both money 

transaction offices were struck from the register. The outcome of these investigations by the 

law enforcement agencies is not yet known. 

• In another case, the police listened in on a 

money transaction office (in connection with an 

investigation of drug trafficking) while the Dutch 

Central Bank visited the money transaction 

office for an AML-CFT investigation. The police 

overheard the suspect’s conversations and 

Over the years, the FIU NL has seen 

a gradual increase in reporting by 

money transfer businesses. Below is 

a chart from the annual reports 

2007 of the FIU NL: 

Number of
 

Unusual and Suspicious
 

Transaction Reports
 

Unusual 

Transaction Suspicious

Year Reports Transaction 

2007 . . . . . . .188,947 . . . . . . .40,893 

2006 . . . . . . .146,158 . . . . . . .28,994 

2005 . . . . . . .130,992 . . . . . . .29,573 

2004 . . . . . . .116,615 . . . . . . .31,008 

obtained information about their intentions and 

actions. The managers and employees of the 

money transaction office involved were arrested 

and the money transaction office was struck 

from the register. Prosecution is pending. 

Case Example: Internet Fraud and Money Mules 

Russian and Ukrainian criminal organizations 

retrieved data from Internet bank account holders. These organizations used “money mules” in 

order to obtain money from these account holders. A money mule is a person who makes his 

bank account available to a criminal or criminal 

organization for remuneration. A money mule is 

often persuaded via a spam e-mail to withdraw 

money—which he receives from victims of a criminal or criminal organization—from his account 

and forwards the money to the account of 

another person (whose personal details the 

money mule also received via e-mail from the 

criminal organization). The money mule can 

retain a part of the money for the services rendered to the criminal or criminal organization. 

When Dutch investigators replied to such a spam 

e-mail, they obtained the personal details of several persons in Russia and the Ukraine who were 

to receive money on behalf of the criminal organization. The FIU NL could even retrieve the personal details of other persons involved in this 

fraud scheme. Several money mules were 

arrested in the Netherlands and money and 

accounts were seized. The Russian law enforcement agencies were asked to arrest several 

“beneficiaries” of this fraud scheme. 

The Dutch authorities handed over all relevant 

information to their Russian and Ukrainian counterparts so that they could start prosecutions in 

their jurisdictions. 
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In the Netherlands 

the increase of the 

use of money transfers can easily be 

explained by the 

fact that immigration figures have 

increased. As is 

shown in the table 

on the previous 

Corner

page, only part of the reports that 

are filed to the FIU NL can be considered as suspicious transactions. 

As mentioned earlier, a unique 

point of the legislation of the 

Netherlands is that every money 

transfer of 2,000 euros and more 

has to be reported. This enables the 

FIU NL to analyze and match more 

information. Combining the information is the key to the increase of 

suspicious transactions. 

The Dutch FIU passes the valuable 

information on to law enforcement, 

which results in more investigations 

being conducted. It can be concluded from the law enforcement 

investigations that criminal organizations’ use of money transfers 

as a technique to quickly relocate 

illicit proceeds to other parts of 

their network is occurring. Money 

transfers can be used in all types 

of predicate offenses, like drugs, 

human trafficking and illegal prostitution. A well-known phenomenon 

in the Netherlands is the advanced 

fee fraud by West African criminal 

networks. A more recent trend in 

that respect is relocating the profits 

from retail fraud via the Internet 

(such as eBay fraud).To successfully 

complete these schemes, the use 

of false identification documents 

is a key element. 

The following are examples of current money laundering and terrorist 

financing typologies: 

• use of intermediaries (straw men 

of second person); 

• cash couriers; 

• use of “money mules,” “smurfing”; 

• atypical money transfers; and/or 

• yse of businesses (travel agencies). 

New Trends: Combining Internet 

and Money Transfers 

One of the trends the Netherlands 

has seen is the combination of the 

unlimited possibilities of using the 

Internet for fraud schemes. The 

underlying predicate offense is a 

very simple fraud scheme: products 

are sold through the Internet, 

money is collected and in the end 

the purchased goods are never 

delivered. The attractiveness of this 

scheme is that both Internet and 

money transfers are anonymous and 

it is a “clean” criminal offense. It 

enables the criminals to leave very 

little information compared to the 

use of bank accounts and high contact crimes, like human trafficking 

and drugs. Most cases are still under 

investigation. 

The typical scheme structure is as 

follows: 

A fictitious product is posted for 

sale on a legitimate online auction 

site, such as eBay. Usually the focus 

is on high price articles, such as 

computers or watches, or highvalue collector’s items. The product 

must be paid for before it is 

shipped to the buyer.The purchase 

is never shipped, so the buyer never 

receives the product. 

Underlying this simple scheme the 

following actions take place: 

• Fraudster had Romanian nationality; 

• Buyer sends a money transfer to
 

the Netherlands;
 

• Cash withdrawal in the Netherlands;
 

• Victims are in another country,
 

like U.S. or Canada;
 

• Use of false identity (identical 

address, but various individuals); 

and 

• Use of false ID cards (identical ID 

cards, various ID card holders). 

Conclusion 

Because of the type of service, a 

clean, fast relocation of money and 

limited personal contact with the 

provider, money transfers remain 

vulnerable to exploitation by criminals. Given the importance of the 

type of service in providing families 

abroad with the necessary 

resources, money transfer businesses fulfill a crucial role in the 

society. However, policymakers, regulators and law enforcement should 

not close their eyes to the vulnerabilities of money transfer businesses 

in the financial system. In the 

Netherlands, the information on all 

money transfers is used to detect 

possible criminal offenses. Solid 

cooperation between financial regulators, the FIU and law enforcement 

enables the Netherlands to successfully combat the exploitation of 

money transfer businesses. $