A convicted French-Israeli conman has explained in an Associated Press (AP) investigation how he has made extensive use of trade-based money laundering (TBML).

Gilbert Chikli particularly used China’s huge trade flows to launder money he obtained as a conman who convinced his victims that he was a CEO of several major companies.

Preferred method

Chikli told AP that his preferred TBML method involved him ordering companies to send money to bank accounts around the world, often in Eastern Europe from whence funds would then be transferred to Hong Kong and China and withdrawn in cash.

That money was used to purchase merchandise, including shoes, gold, steel and textiles in China.

Paper trail

For a commission, the Chinese vendor then issued highly inflated receipts to Chikli’s shell companies, creating an apparently legal paper trail.

Typically, Chikli told AP, he would buy some goods, while forwarding most of his cash to another account he controlled. He might purchase, say, 20 tons of steel, but bribe the vendor to provide him a receipt for 100 tons.

Chikli sold the goods and then sent the money to Israel, where false invoices made the entire sum look like legitimate trading profits, he said.

On the run

The conman, who is a fugitive from the French justice system in Israel, is thought to have extorted some US$1.8 billion from the companies he conned.

Israel has refused French requests for Chikli’s extradition to France.

A full account of the AP investigation can be found here.

Categories: Trade Based Financial crimes News