Life policies – case study 1

Mrs T (teacher) from country A, entered into a life insurance policy with a small initial premium being paid. The transaction was arranged by Mr B who was the agent of insurance company C and a cousin of Mrs T. Two days later, company C made a payment of an additional premium, in excess of €540,000, on behalf of Mrs T. After one month, Mrs T cancelled her policy and transferred the refund of contributions to three different accounts:
a) Mr MD (Managing Director of Company C) – €240,000;
b) Mrs N (niece of Mr MD) – €150,000; and
c) Mr U – €150,000.
All of them subsequently transferred the money onwards to other accounts in different banks. Following an investigation it appeared that the money being laundered was linked to fuel smuggling. The accounts were blocked by the Financial Intelligence Unit (FIU) and the case was forwarded to the public prosecutor.

Life policies – case study 2

A single premium on a life policy, totalling more than €500,000 was paid on behalf of Mr A by Mr A’s employer, who was a related person. Half of the amount was withdrawn by Mr A within a month of paying the premium. A request for withdrawing the balance of the amount was filed at the same time.
Following a report to the FIU subsequent checks revealed that Mr A had a criminal record and was involved in pending legal proceedings. It also appeared that Mr A was allegedly involved in drug dealing and assassinations. Following further investigation and collection of information, including tax records, and movements of funds on Mr A’s accounts the relevant information was forwarded to law enforcement agencies.

Life policies – case study 3

A life insurance policy with a very high single premium included a clause for partial redemption, at the client’s request, at the end of each year. The client claimed that the purpose of the clause was to repay the interest on a loan with a duration of 10 years, intended to facilitate the building of a warehouse. The insurer reported a suspicion to the local FIU because of the high premium and because the client refused to name the bank where he had taken up the loan. After careful examination by the FIU, it turned out that the client was known to the police as he had committed financial fraud. It appears that the client had tried to launder money by means of a life insurance product.

Life policies – case study 4

An insurance company filed a report of suspicion concerning two foreign individuals each of whom bought a single premium life insurance contract. The premiums were very high. The investigation by the FIU showed that the premiums for these insurance policies were paid through the current accounts of the two clients, while payments to the accounts consisted of cash deposits the origin of which was unknown. Moreover, the accounts were only used for payment for the insurance policy and the account holders had already been the subject of a report on illegal drug trafficking. According to the police reports, the individuals were members of a network responsible for trafficking drugs from Latin America to Western Europe. The insurance company reported suspicion of potential money laundering on the basis of several factors, namely that the policyholders did not have an official address in the country where they wanted to buy the policy, they were not exercising any professional activity in that country, and they could not explain the origin of the money. This case is currently subject to legal proceedings.

Life policies – case study 5

Mr A, who claimed to be a 25 year old garage owner, bought a life insurance policy with a high single premium in relation to his age. The policy was issued for a duration of 10 years with Mr A being the beneficiary if alive and Mrs B being the beneficiary in the case of the death of Mr A during the 10 year duration of the policy (Mrs B being the grandmother of Mr A). The insurance company reported the case to the FIU. Research by the FIU showed that Mr A did not own a garage but had been involved in drug trafficking. The FIU forwarded its report to the department of justice, which dealt with cases of drug trafficking.

Copies of the paper are available. http://www.iaisweb.org/view/element_href.cfm?src=1/20141.pdf