The Biggest Money Laundering Schemes in History

Most of us hear about money laundering schemes in crime movies and gangster dramas. However, the reality is that criminals launder between $800 billion and $2 trillion around the world each year.

Despite the best efforts of organizations such as FATF, or the Financial Action Task Force, this type of financial crime still runs rampant around the world.

Even though anti-money laundering efforts have been put in place to keep people safe from these types of crimes, history has still seen its fair share of money laundering schemes. Let’s take a look at some of the biggest of all time.

Sani Abacha

Sani Abacha was a military dictator who ruled Nigeria from 1993 to 1998. He and his family managed to transfer roughly $8 billion into foreign bank accounts.

What makes this case so incredible, however, is that he wasn’t just transferring his own money. He was stealing as much as 10% of all of the national income of Nigeria!

Thankfully, after his death, the government of Nigeria was able to get roughly $2 billion back.

The Bank of Credit and Commerce International (BCCI)

Another major money laundering scandal involves BBCI, which was formerly one of the largest private banks in the world. This bank was involved in huge amounts of money laundering during the 1980s.

Drug money and other criminal profits went through the bank, cleaning the money and putting it out into the economy. This was mostly due to the fact that the bank allowed pretty much anyone to open an account. A few notorious clients of the bank include Abu Nidal and Saddam Hussein.

Benex

The Benex Scandal is a scandal where the Russian Mafia was able to use Benex Worldwide accounts from the Bank of New York to launder money. The money was called capital flight money, which means that it was quickly removed from Russia and brought to the United States.

Before the scandal was uncovered, the mafia was able to smuggle roughly $8 billion through the banking system. Luckily, in 2002, a huge police raid took place which shut down the operation.

Franklin Jurado

One man with a Harvard education, Franklin Jurado, received a conviction for laundering $36 million dollars of Colombian drug money. The money was the property of José Santacruz-Londoño, a member of the Cali Cartel.

Jurado was an economics graduate who funnelled the money throughout European businesses and banks. Then, he sent the money back to Colombia and received a fee for his efforts.

In 1996, a bank in Monaco made the connection between his multiple offshore accounts and reported him for money laundering. He spent nearly eight years in jail as penance.

Nauru

A couple of hundred miles off the coast of New Guinea lies a small island named Nauru. Nauru, while a little known place, has played a key role in some major money laundering activities.

During the 1990s, Russian mobsters laundered roughly $70 billion through banks registered in Nauru. They chose Nauru as the location for their money laundering because Nauru doesn’t require banks to record a paper trail of money or to take customer IDs.

Al Capone

One of the most famous mobsters in the United States was Al Capone, who also happened to be a master money launderer. Al Capone earned millions of dollars on his illegal bootlegging business and washed the money through a series of businesses.

His earliest businesses were laundromats. Because they were a cash-based business, they were ideal for laundering and cleaning his money.

In 1931, Capone was indicted. However, he wasn’t indicted for money laundering. He was brought into prison for tax evasion.

Meyer Lansky

After Capone was put in jail, one of his buddies, Meyer Lansky, decided that it was time for him to hide his own money laundering. Lansky was an accountant who had earned plenty of money off the sale of illegal alcohol.

To get rid of the money and avoid incrimination, he laundered nearly $1 billion through a casino empire. He never received a conviction for his crimes and died a very rich man in the early 1980s.

Ferdinand Marcos

The former president of the Phillippines, Ferdinand Marcos, was another prime money launderer. He laundered billions of dollars through Swiss and US banks, all of which had been stolen from public funds.

The Phillippines launched a massive operation to retrieve the money. They were able to recover the majority through an operation which they named “Operation Big Bird”.

President Suharto

One of the most corrupt leaders in the world is President Suharto, a president who ruled Indonesia from 1967 to 1998. Until he was forced to resign, the president had a total of $15 billion.

Out of that money, the president washed more than half in an Austrian bank. He used the offshore banks to wash his illegally earned money and protect him from discovery by the police forces in Indonesia.

Pablo Escobar

One master of financial crime is Pablo Escobar, who was a famous drug lord. Pablo Escobar made so much money on his drug business that he ended up burying hoards of cash because he couldn’t clean it fast enough.

Pablo Escobar was a master money launderer who used big sums of cash to bribe or threaten PEPs, or publicly exposed persons, to help him wash the money. At the height of his career, he was estimated to have roughly $9 billion dollars.

Beat Money Laundering Today

As you can see, there have been some crazy money laundering schemes over the years. Conducting risk analysis and having strong AML practices in place is the key to avoiding getting tangled up in these types of schemes.

Are you ready to take advantage of Fintech and RegTech that protect you and keep your company compliant? Get in touch with DX Compliance Solutions today!