Bangladesh police reportedly have more than 100 firms under surveillance after investigations found evidence of their involvement in trade finance based money laundering.
The Criminal Investigation Department (CID) alleges that the firms routinely use letters of credit (L/Cs) as a tool for money laundering.
The CID investigations were launched after the police were alerted of the possibility of money laundering at the firms by central bank officials.
Investigators will soon respond to the bank officials by sending them the results of the investigation so that Bangladesh Bank can take action against identified money launderers.
Special superintendent of the CID, Ashraful Islam, said the police had uncovered, “money laundering through L/Cs on imports of capital machinery and other goods.”
As well as noting that the firms employed L/Cs in dubious transactions, Islam said investigators had also found evidence of both over- and under-invoicing.
During their inquiries, investigators say they found invoices for capital machinery imported under duty-free facilities, showing prices inflated by 60 per cent over the real cost of the machinery.
The special superintendent said falsifying invoices in Bangladesh has “increased significantly” in recent times and pointed to an absence of proper monitoring and lack of punishment as factors encouraging money laundering.
According to Islam, most of the companies are using fake addresses for opening L/Cs employed in money laundering scams.
The central bank may have been alerted to this particular cohort of money launderers by a sharp 19% increase in capital machinery imports in July and August 2014 compared with the same period last year.
Categories: Trade Based Financial crimes News