Glossary

The body of laws, regulations, and institutional controls aimed at detecting and preventing money laundering. AML rules require banks and other regulated businesses to identify customers, monitor transactions, and report suspicious activity to authorities.

The 1970 US law that created modern financial recordkeeping and reporting duties, including the $10,000 currency transaction report. Most US AML rules, and FinCEN's authority, hang off the BSA.

See: Structuring (smurfing)

The real person who ultimately owns or controls an account, company, or asset, regardless of whose name is on the paperwork. Hiding the beneficial owner behind companies and nominees is the core move of most laundering structures.

See: Shell companies and nominees

A trade-based system in which a peso broker buys a cartel's US cash at a discount, uses it to pay US exporters on behalf of Latin American importers, and delivers pesos to the cartel at home. Dollars never cross the border; goods do.

See: Black Market Peso Exchange

A currency exchange house, especially in Latin America. Casas de cambio moved billions in cartel proceeds into US banks in the 2000s, the mechanism behind the Wachovia case.

See: HSBC and the Sinaloa cartel

CDD is the standard package of checks on a customer's identity, ownership, and expected activity. EDD is the deeper version applied to higher-risk customers (politically exposed persons, correspondent banks, cash-heavy businesses), involving source-of-funds and source-of-wealth questions.

Swapping illicit crypto rapidly across blockchains (Bitcoin to Ethereum to Tron) through bridges and swap services so no single chain's analytics see the whole route. A signature move of North Korea's Lazarus Group.

See: Chain-hopping and cross-chain bridges · Lazarus Group

Criminal forfeiture takes assets as part of convicting a person; civil forfeiture sues the asset itself, on the theory the property is tainted, without needing a conviction. Civil forfeiture is how the US recovered 1MDB mansions and art from owners it could not arrest.

See: 1MDB

The US report (FinCEN Form 105) required when more than US$10,000 in currency or monetary instruments physically crosses the border, in either direction. Carrying the cash is legal; failing to report it invites seizure.

A collaborative Bitcoin transaction format in which many users combine inputs and outputs so observers cannot match who paid whom. Wallets built around it (Wasabi, Samourai) drew enforcement over money transmitted for criminals.

See: Mixers, tumblers, and CoinJoin

The arrangement that lets a bank in one country hold accounts with a big international bank to reach currencies and payment systems it lacks. The correspondent sees its customer bank, not that bank's customers: the blind spot behind Danske Bank and similar scandals.

See: Danske Bank Estonia

The report a US financial institution must file with FinCEN for cash transactions over US$10,000 in a business day, aggregated per customer. CTRs are routine and the customer is aware of them, unlike suspicious activity reports.

See: Structuring (smurfing)

A laundering method that hijacks an innocent customer's expected international transfer: criminal cash is deposited into the recipient's account locally, while the clean funds abroad are diverted to the criminal. Named for the cuckoo's habit of laying eggs in other birds' nests.

When banks exit whole categories of customers (remitters, charities, entire countries' banks) rather than manage their AML risk. It pushes transactions into less-supervised channels, which is why regulators discourage it even while demanding tougher controls.

A deal in which prosecutors file charges but suspend them while the company pays penalties and reforms under supervision, with dismissal if it complies. HSBC's 2012 resolution was a DPA; critics call DPAs the price of 'too big to jail.'

See: HSBC and the Sinaloa cartel

The global network of financial intelligence units (170+ members) through which FIUs exchange information across borders. Often the fastest legal channel for following money internationally.

The intergovernmental body, founded at the 1989 G7 summit, that sets global AML standards (the 40 Recommendations) and grades countries against them. Its three-stage model of laundering and its grey and black lists shape law worldwide.

The Chinese informal value-transfer tradition, dating to the Tang dynasty: a claim payable in another city, so value 'flies' without silver moving. Its modern descendants include the underground banking networks that match cartel cash with Chinese capital flight.

See: Flying money: Chinese underground banks

The national agency that receives and analyzes suspicious-transaction and cash reports: FinCEN in the US, FINTRAC in Canada, AUSTRAC in Australia, the NCA's UKFIU in Britain. FIUs turn millions of filings into intelligence packages for investigators.

A high-security, tax-advantaged storage zone (typically near an airport) where art and valuables can be held and traded without entering any country's customs territory. Assets can change hands inside a freeport with minimal public record.

A business with genuine operations used as cover for illicit funds: a restaurant or car wash whose books mix dirty cash into real revenue. Unlike a shell, a front actually trades; that is what makes its numbers hard to disprove.

See: Cash-intensive front businesses

An account that collects cash deposits in many cities and is drained from somewhere else, moving value across a country without wires. FinCEN's 2014 advisory flagged funnel accounts as a cartel staple.

See: Money mules and funnel accounts

FATF's pressure lists. The grey list ('jurisdictions under increased monitoring') names countries fixing strategic AML deficiencies under a plan; the black list ('call for action'), Iran, North Korea, and Myanmar as of August 2026, triggers enhanced precautions worldwide.

A FinCEN order imposing extra reporting in specific places for a limited time. The best-known GTOs required title insurers to identify buyers behind all-cash residential purchases from 2016 until February 2026, when a nationwide reporting rule replaced them.

See: Real estate

An informal value-transfer system, centuries old, in which a broker (hawaladar) in one country takes cash and a counterpart in another pays it out, with the brokers settling between themselves later. Overwhelmingly used for legitimate remittances; abused because value moves without a transaction record.

See: Hawala and informal value transfer

The final stage: laundered money re-enters the economy as assets with their own paper trail (property, businesses, portfolios), producing income the owner can openly explain.

See: Real estate

The identification and verification work a financial institution does when taking on and maintaining a customer. KYC is the foundation the rest of AML sits on: monitoring only means something if the bank knows whose behaviour it is watching.

The second stage: moving money through transactions, entities, currencies, and borders to bury the trail back to the crime. The goal is to make tracing cost more than the money is worth.

See: Shell companies and nominees · Mixers, tumblers, and CoinJoin

Canada's equivalent of the CTR: a report to FINTRAC for cash transactions of C$10,000 or more, including amounts that reach the threshold within 24 hours combined. Casinos file them too, which is central to the Vancouver Model story.

See: Structuring (smurfing) · Casinos and gambling · The Vancouver Model

Borrowing your own hidden money: an offshore entity the launderer secretly controls 'lends' funds back to them, creating a documented source of money and interest payments that look like business expenses.

See: Shell companies and nominees

Matched securities trades (buying in one currency and office while a related party sells the same securities in another) that move money across borders with no transfer on any wire. Deutsche Bank's Moscow–London mirror trades moved about US$10 billion this way.

A service that pools many users' cryptocurrency and pays out equivalent amounts from the pool, breaking the on-chain link between coins in and coins out. Operators from Helix to ChipMixer have been prosecuted; the smart-contract mixer Tornado Cash was sanctioned in 2022 and delisted in 2025.

See: Mixers, tumblers, and CoinJoin

A person who receives and forwards illicit money through their own account, sometimes recruited knowingly, often deceived through job ads or romance scams. Mules give schemes real accounts with real identities attached.

See: Money mules and funnel accounts

A non-bank business that transmits money, cashes cheques, or exchanges currency: remitters, currency exchanges, some crypto businesses. MSBs must register and report in most jurisdictions, and weak or complicit ones are classic placement channels.

A crypto service that operates through accounts on a legitimate exchange rather than its own infrastructure, hiding its customers inside the host's traffic. The crypto equivalent of nested correspondent accounts.

See: Stablecoins and OTC brokers

When a third bank or service quietly uses another institution's correspondent account, riding inside its access. The top-level bank believes it is serving one customer while actually serving that customer's hidden customers.

See: Danske Bank Estonia

A person or firm who appears as a company's director or shareholder on behalf of someone else, under private agreement. Nominees let the real owner stay off every public document.

See: Shell companies and nominees

An over-the-counter trading service that converts large amounts between crypto and cash privately, outside exchange order books. Lightly regulated OTC brokers are a main off-ramp where laundered crypto becomes spendable money.

See: Stablecoins and OTC brokers

Moving a large crypto balance through a long series of addresses while 'peeling' small amounts off to exchanges at each hop, keeping every deposit below attention. The blockchain version of structuring.

See: The Bitfinex hack laundering

Someone holding or close to prominent public office: ministers, state-bank executives, their families and associates. Banks must apply enhanced due diligence to PEPs because public power plus opaque wealth is the classic corruption profile.

See: 1MDB

Long-con investment fraud in which scammers 'fatten' victims with fake trading gains before taking everything, an industry run from compounds in Southeast Asia, with proceeds laundered heavily through dollar stablecoins and guarantee marketplaces.

See: Stablecoins and OTC brokers

The first stage of money laundering: getting crime proceeds, usually cash, into the financial system. It is the riskiest stage because it is where the money first meets a record.

See: Structuring (smurfing) · Cash-intensive front businesses · Casinos and gambling

A network that launders other people's criminal proceeds as a business, for a commission. FATF documented the model in 2018; Chinese underground banking networks serving cartels are the most consequential current example.

See: Flying money: Chinese underground banks

The underlying crime that generated the money: drug trafficking, fraud, corruption, tax evasion, human trafficking. Laundering is charged as a separate offence on top of the predicate, and in most regimes the predicate can have happened abroad.

A cryptocurrency whose ledger hides sender, receiver, and amount by design; Monero is the main example. Conversion into a privacy coin ends most on-chain tracing, which is why many exchanges have delisted them.

See: Chain-hopping and cross-chain bridges

Sending money out of a country illicitly and bringing it back disguised as foreign investment or a foreign loan, often through treaty jurisdictions. The returning money enjoys a welcome mat (and sometimes tax benefits) instead of scrutiny.

A confidential report a US institution files with FinCEN when activity looks suspicious, generally from $5,000 with suspicion (or at any amount for some conduct). Filing is secret; telling the customer is itself an offence.

See: Structuring (smurfing)

A company incorporated and left dormant ('on the shelf') so it can be sold later with an established registration date. The aged paperwork helps a new owner look like a long-running business.

See: Shell companies and nominees

A legally registered company with no real operations, staff, or premises, existing mainly to hold assets or accounts. Shells are legal to create; stacking them across jurisdictions to hide ownership is the standard layering structure.

See: Shell companies and nominees

Structuring done with a crew: many hired depositors ('smurfs') each placing small amounts across branches and accounts. The name comes from the swarm of small, interchangeable cartoon characters.

See: Structuring (smurfing) · Money mules and funnel accounts

A cryptocurrency pegged to a fiat currency, usually the US dollar: Tether (USDT) above all. Speed, stable value, and a global broker network have made dollar stablecoins a dominant rail for laundering scam and sanctions proceeds.

See: Stablecoins and OTC brokers

The Canadian (and international) counterpart of the SAR, filed with FINTRAC on reasonable grounds to suspect a transaction relates to money laundering or terrorist financing. STRs have no minimum dollar threshold.

Splitting cash transactions into amounts below a reporting threshold so no report is filed. A standalone crime in the US since 1986, regardless of where the money came from.

See: Structuring (smurfing)

Moving value through trade paperwork (over- or under-invoicing, phantom shipments, misdescribed goods) so money crosses borders disguised as payment for commerce. Exploits the fact that customs and banks rarely check invoice prices against market value.

See: Trade-based money laundering

Processing card payments for a hidden business through another merchant's legitimate account, or through a fake storefront. The processor vets the front merchant while the real commerce rides underneath.

The requirement that identifying information about sender and recipient 'travel' with a funds transfer, so the trail survives across institutions. FATF extended it to crypto transfers in 2019, forcing exchanges to pass customer data the way banks do.

A court order, pioneered in the UK in 2018, compelling someone to explain how they lawfully acquired an asset; an unsatisfactory answer supports recovering the property. It shifts the practical burden onto the owner.

See: Real estate

FATF's term for crypto businesses (exchanges, custodians, some wallet providers) that fall under AML obligations. If a service touches customer crypto, regulators increasingly expect it to run KYC like a bank.

Trading an asset with yourself through different accounts to fabricate volume or price. In laundering, a wash-traded 'sale' (of a security or an NFT) manufactures a plausible receipt for moving value.