Money laundering and terrorist financing modus operandi in Tunisia

Money laundering and terrorist financing modus operandi in Tunisia

The Tunisian Commission for Financial Analysis (Ctaf) under the Central Bank of Tunisia has published its annual report for 2021. Ctaf is the main government agency responsible for combating financial crime.

In this report, the commission presented four modus operandi used for money laundering and terrorist financing. The four respective modus operandi summarize the relationships and financial transactions observed in three cases of money laundering related respectively to the use of the “Money Mule Network”, trade (TBML) for corruption and crime against the environment and a case of financing of terrorism, through an imam who received transfers from abroad.

Here we take excerpts from the Ctaf report about these four operating methods.

Case example No. 1: Financing of terrorism

CTAF received a report of suspicion of a certain (X), Tunisian, imam of a mosque, who attempted to receive a transfer from a foreign natural person residing in the country “Xland”. It is pointed out that the financial flows recorded in the named (X) account are inconsistent with the customer’s profile.

In the period from 2011 to 2021, the named (X)’s account was mainly credited with cash payments totaling 84,630 dinars made by two persons (Y) and (Z) without any apparent financial connection with the account holder.

Similarly, analysis of the account revealed the receipt of funds from a natural person’s account opened in “XLand”, without any visible relationship between the principal and the beneficiary, which raises questions about the legitimacy of the claimed reason, namely “Family Aid” in the form of dubious transfers It should be noted that the flows recorded in the account were withdrawn in cash.

On the financial level, CTAF’s investigations made it possible to highlight that the named (X) is the head of a kindergarten for which it was not possible to find an account at the banking center and a wholesaler level company whose account was slightly affected. In addition, it turns out that the person named (X) is the founder of an association with the same address as the kindergarten’s.

Warning criterion

The named person (X) is reported to the national law enforcement authorities as being an extremist person who has traveled to several countries (including the country Xland where the transfers are issued) with a view to joining terrorist organizations; Having close ties in Tunisia with terrorists; The association, of which he is the founder, is reported by the services of the CTAF, that it has been the subject of two national collaborations originating from two different administrations and that this has been in court order since 2014.

The so-called (Y) and (Z) initiators of cash payments registered to the account subject to the suspicious transaction report are also known to the national law enforcement authorities as being linked to extremist terrorist organizations abroad.

Conclusion of the analysis

The operations carried out were considered suspicious at the level of the operational analysis, given the significant use of cash without any visibility on the origin and destination of the funds; Foreign transfers received without financial background; Those named (X) and those involved in the case are known to law enforcement authorities to be extremists with links to terrorist organizations.

CTAF, in light of the indications of suspected terrorist financing and the aforementioned alert criteria, forwarded the case to the Public Prosecutor’s Office. CTAF proposed the inclusion of the said person on the national list of persons and organizations and entities associated with terrorist crimes.

To this end, the CNLCT has registered the named (X) on the national list of persons and organizations and entities linked to terrorist crimes at the suggestion of the CTAF.

Typological Case No. 2: Money Mule Network

CTAF received a DS (Declaration of Suspicion) regarding X, a woman with triple citizenship, Tunisian, Swiss and British, and her husband Y, an Anglo-Lebanese, both living in one of the posh districts of L-Land.

– X and Y each established between 2014 and 2018 service companies in L-Land with a share capital of £1 (or even £100,380 dinars).

– The two parties have opened several bank accounts in Tunisian dinars and in foreign currency with a Tunisian bank.

International cooperation with the foreign counterpart (in L-Land) of Ctaf, as well as research in open sources made it possible to obtain the following information:

– X and Y are part of an international network specializing in organized crime that attracts foreigners and encourages them to visit L-Land for a period of one or two days to establish businesses or open bank accounts. These accounts (Mule accounts) record acceptance of funds as a result of fraud and corruption, most of which are then transferred to accounts opened in C-Land and H-Land.

– X is accused of being involved in a multi-million pound fraud operation, defrauding natural and legal persons through fictitious services offered.

Conclusion of the analysis

In conclusion, Ctaf states that the money transferred to Tunisia is the result of fraud, fraud and corruption.

– X and Y have exhausted the three stages of money laundering using the Tunisian banking and financial center.

– Based on the collected indications of suspicion, CTAF froze the funds in connection with these DS and forwarded the case to the State Attorney. A legal investigation has been launched.

Typological case no. 3: Corruption and crime against the environment

CTAF received suspicious transaction reports regarding named X and named Y.

– X is a politically exposed person and manager of ALPHA, a company specializing in procurement, collection of metal waste and metal foundry.

– Y is a responsible politically exposed person in a public administration.

According to Ctaf sources, X would have had activities related to smuggling.

20 days after being dismissed from his position, Y cashed in his personal account two checks of 50,000 dinars each, drawn from the company ALPHA’s account.

Alarm criteria

The financial flows between two politically exposed persons (PEP) with no financial background and bad reputation in the media were enough to alert the bank, then Ctaf. From there, the investigation was opened.

– Several cash payments registered on X’s personal accounts and ALPHA’s account, of unknown origin. These cash payments were followed by several short-term investments of large amounts (cash securities) and redemptions of these investments.

– ALPHA’s account recorded several transfers received from two companies dealing in stainless steel, aluminum and specialized non-ferrous metals, the first located in I-Land and the second in B-Land.

– The accounts opened in the name of the other companies of X (operating in agriculture and olive oil trade) recorded some bank transactions which seem insignificant compared to those carried out by ALPHA.

Y’s account:

– Y’s personal account recorded ongoing transactions related to the receipt of his monthly salary as a civil servant and cash withdrawal transactions.

– When Y cashed the checks drawn from ALPHA’s account, Y rushed to spend this money (issuance of checks in favor of natural persons with no apparent financial connection and cash withdrawal).

– Asked by the bank about these unjustified cash flows, Y limited himself to justifying only the operations carried out with a named Z by presenting a promise to sell an apartment worth 180,000 dinars.

– Y donated part of the sum to the company ALPHA.

– The current between Y and ALPHA remains unwarranted.

According to Ctaf’s investigations, it was found that in 2017 ALPHA had obtained an authorization issued by the administration where Y was in service to collect, transport and recycle used batteries.

Conclusion of the analysis

And to conclude that it is smuggling mixed with possible corruption (using one’s quality and thereby gaining oneself or giving a third party an unjustified advantage).

For Ctaf, the sale of the property appears to be a cover, and Z appears to be playing the role of a straw man.

Based on the collected indications of suspicion, the case was sent to the State Attorney. A legal investigation has been launched. The two EPPs were arrested.

Typological Case No. 4: Trade-Based Money Laundering (TBML)

Ctaf received a suspicious transaction report on behalf of a person named (X), of French-Tunisian nationality, an engineer by profession and with a personal account in euros opened in Tunisia. This account has recorded financial transactions that are not in accordance with his declared occupation as an engineer, and he is making transfers in favor of companies established abroad specializing in the medical sector.

According to the information collected by the complainant, it was found that the named person (X) manages a company (BETA) in Tunisia that specializes in the import and sale of medical and dental equipment.

Warning criterion

– X did not inform the bank when he opened his personal account about the nature of his activity as managing partner of BETA in Tunisia.

– X’s personal account was funded by cash payments (€138,000) and transfers from several natural persons (€204,000), for a total amount of €342,000.

– Most of the funds in X’s account were transferred to accounts opened abroad in the name of companies specialized in the medical-dental sector (€282,000)

– The investigations carried out by Ctaf have shown that the companies with which the BETA company carried out the importation of goods are the same companies that benefit from the transfers ordered by the head of the BETA company.

– X and his company BETA were subject to a customs investigation for falsely declaring the value of imported goods using forged documents.

In this typology above, Company BETA and Mr. X a trade-based money laundering technique known as “goods under-invoicing”. The key elements of this technique consist of a declaration minus the price of the goods (invoicing the goods at a price below the fair market price).

To succeed with this technique, the importer and exporter are usually complicit.

Conclusion of the analysis

X declared a value of goods lower than the real value in order to pay the minimum duties and taxes due, while using his personal account to pay suppliers abroad so as not to arouse suspicion.

– The investigations carried out by Ctaf revealed that X committed customs and tax offences.

– This is a classic typology using one of the techniques of trade-based money laundering (TBML)

Based on the collected indications of suspicion, the case was sent to the state attorney. A legal investigation has been launched into this.

Source: Ctaf 2021 report

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