The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory alert for financial institutions concerning the potential flow of money from Venezuela to the United States due to political instability surrounding widespread corruption in the South American nation.
As each new scheme is identified and unwound, the IRS gains information about U.S. accountholders, proving again that it is not a matter of whether tax evaders will be caught, but rather when they will be caught.
The following are some red flags you should be aware of to help you avoid involvement in money laundering schemes:
- Transactions involving government contracts directed to personal accounts or accounts of unrelated companies (for instance, payments for construction projects directed to textile merchants);
- Transactions involving government contracts involving shell corporation entities, general “trading companies,” or companies that lack a general business purpose;
- Transactions for the purchase of foreign real estate;
- Documentation showing charges at higher-than-market rates;
- Documentation that is overly simplified or lacking in traditional details (such as valuations for goods and services);
- Payments for government contracts that originate from non-official or non-local accounts; and
- Cash deposits.
To read the full advisory notice, click here.