Is this money laundering?

[Upthefinancialcreek]

Two people are moving money in and out of each other’s accounts.

For example, 1st Jan A pays B £500. B then pays A £500 on the same day.

There are also a lot of cash withdrawals.

In total A pays B £10,000. B pays A £10,000. A withdraws £10,000.

Is that money laundering? How does it work?

Are you being coercierced in to doing this. The tone of your message sounds like its you who is being asked to move money in a certain way?

Yes - I expect it's this. A lot of bank accounts enable benefits (e.g. travel insurance) if you put through (e.g.) £2000 per month. It's a recognised (and not illegal) way to "game the system" by having several of these accounts on the go for different benefits. I think Martin Lewis did a bit on it a few years ago. For most people it's a lot of hassle, but it's not fraud and is small fry as far as banks are concerned about cracking down on it, as technically the T&Cs are being met.

That's what I was thinking, does B need to show that they have money in their account when somebody is checking on that certain day in the month, or does A need to show that they have a major outgoing on a certain day.🤔 bit strange

Is it a much larger and more complicated version of me moving £500 into my savings and back again each month to avoid £5 charges on my Lloyds account which needs £2k a month in to avoid charges. With some banks you need money from outside the bank, though with Lloyds it can come from your own Lloyds accounts.

Hubby and I do this, albeit with smaller amounts so that each of us qualifies for better bank accounts that come with “pay in X amount each month”. It’s only money laundering if you are using it to hide where the money is coming from and are trying to lose the source of that money in the chain of transfers

This reminds me of a scenario from when I first started working in a bank in the 1970!s it was called crossfiring, it was deemed as unusual and an indicator that the account holder was in financial trouble.

It sounds like they are talking cash from their credit cards with out paying the fees. A pays an invoice to b with credit card and b the. Returnes the cash and visa versa .

Money withdrawn from a credit card is from a legitimate source, I.e a credit card company. It’s not proceeds of crime being washed. If it was being put in as cash then it’s different t

I looked again today as they’ve left me with some things to look over.

Large amounts of cash are being put in too, I cannot see where it’s come from. At first I thought they might be withdrawing cash, gambling and paying winnings in but there are no withdrawals, only cash paid in. And often.

Large meaning a few hundred

I see a lot of posts where I think the OP is answering the wrong question.

In this case I think OP should be asking if she should go into business with someone who has asked them for budgeting support, and who cannot explain their financial records.

The answer is no, btw.

Are you their accountant or a relative? Are you responsible in some way? Or implicated if it is a crime?

Would it improve their credit scores by making it look like active regular income?

Sorry I missed a chunk of your posts! If you’ve got no responsibility here, then it sounds very dodgy and if they aren’t explaining it then don’t get involved. But also, if they are money laundering why would they ever show you their accounts?

What a strange thing for them to do.

They were asking for some help with accounts, which I have experience of.

I think I’m going to pass on working with them…it just doesn’t sit right with me.

I know a lot of people have said that it's not ML, but you can't be certain from your cursory examination of their accounts that you have the full story, and it might just be ML. I just want to mention that if you make them aware that you think they're involved in ML that you are in fact 'tipping off' and I think it's subject to 5 years in prison! That might just be for people in the finance industry, as I was, but be very careful.

Could be child support.

I did similar for a while, and in my case it wasn't money laundering. I had a bank account where you had to pay in a minimum amount per month to qualify for perks (like better intrest rates and cash back). When I was on maternity leave, my income dropped below the monthly amount, so I transferred money out and back in again every month.

Could it be something similar, where it's beneficial to make it look like more money is being paid into the account, without it been dodgy money.

Yes, on MSE forums loads of people do this, I have had to do it since Lloyds upped the amount you needed to avoid charges which also went up but because you can just move it from a savings account with them I have one of those very low interest easy access accounts just for this and do it each month.

It's a basic shell game for business expenses for A, as they have to pay a percentage on their cash advance (legitimate expense), then sending it to B, B then turns it around and gives it to A, and then will withdraw it as a shareholder loan or distribution. The amounts are small enough to not get noticed, but what will red flag the transactions is how they are classified on invoices between the two businesses. Bigger companies have multiple businesses they will move money back and forth to help offset tax liabiity for those which are profitable versus those losing money. Trump admitted some years back they file tax returns for over 500 entities, and unless there's a forensic audit, it's tough to find out owner loans, etc. that will never get paid back. If A is doing well, B is just starting out, then B needs the "income" from A to look good on the financials even though it's not kept in the bank.

UK is much more lenient than the US, as micro-entities need to run over £1m, £500,000, has a "simplified Balance Sheet, which would not scream out the bank account numbers, loans, dividends, etc.

Mind your own business.

Perhaps it's an airmiles scheme that got out of hand ?

They were talking about setting up together, so that makes it her business.