Financial transactions and services typologies refer to the methods and techniques used by criminals to launder money or finance their activities. These mechanisms often involve complex financial structures and transactions designed to obscure the true source of funds or assets to evade detection and launder these illicit gains.

Common financial transactions and services mechanisms

Bank accounts

Criminals co-mingle illegal and legal proceeds, placing funds generated from environmental crimes into legitimate business accounts. This exposes financial institutions to criminal clients seeking to intermix and hide illicit proceeds. Often, criminals will present illegal earnings as legitimate earnings from a legal business activity they also undertake in tandem, making it harder to identify and differentiate illegitimate funds or activities from legitimate ones.

Deforestation and land conversion alert

Proceeds from illegal logging may be disguised as income from legitimate harvesters or timber processors.

Illegal wildlife trade alert

Proceeds from illegal wildlife trade can be funnelled through businesses such as exotic pet shops, zoos, or traditional medicine vendors, making it difficult to trace the origin of the funds.

Nominees, trust companies, and intermediaries

Complex networks of intermediaries, such as nominees or custodians can be exploited to disguise beneficial ownership of a bank account, investment vehicle, or other financial instrument. This strategy is designed to avoid detection and to prevent such accounts from being linked back to criminal activity.

Illegal mining alert

Proceeds of the illegal gold trade may be funnelled through shell companies or trusts that appear to operate legitimate mining services, refinery businesses, or legitimate trade.

Shell companies

Corporate entities with no significant assets or legitimate business operations are used to launder the illicit proceeds of environmental crime, facilitate illicit trade, purchase clandestine assets, or obfuscate the beneficial ownership of financial assets held in their name.ownership of a bank account, investment vehicle, or other financial instrument. This strategy is designed to avoid detection and to prevent such accounts from being linked back to criminal activity.

Illegal wildlife trade alert

Import-export businesses are used to justify shipments of trafficked species, or to move funds linked to poaching and trafficking activities across borders without detection.   

Transactional manipulation

Criminals can manipulate financial transactions to avoid detection by financial institutions (FIs). This technique is often used to avoid triggering reporting thresholds that FIs must follow, as well as to layer illicit funds and obscure the source of those funds. Creating a high volume of complex transactions can overwhelm monitoring systems and investigators, making it more difficult to spot patterns indicative of money laundering.

Illegal mining alert

A criminal may transfer funds through accounts linked to small-scale mining cooperatives or equipment suppliers before withdrawing the funds in cash.

Bank or wire transfers

Bank and wire transfers can disguise the movement of illicit funds, with third-party accounts and masking payments appearing as legitimate transactions for goods or services. These payments are typically crafted to align with the commercial activity of the sector in which the criminal operates – such as agricultural commodities or legally sourced minerals – to reduce suspicion. It is therefore important for FIs to monitor who their clients are transferring money to, to see if funds are going to individuals or entities with higher risk characteristics, such as offshore accounts or newly established companies with no clear legitimate business operation.

Illegal mining and deforestation alert

Funds may be wired under the pretence of purchasing mining equipment.

Illegal wildlife trade alert

Traffickers may route payments through shell import-export companies, claiming the payments are for legitimate animal breeding in fact covering the cost of poaching animals from the wild. Such schemes are often facilitated by falsified CITES permits or invoices, making it harder for financial institutions to distinguish between lawful and unlawful activity.

Informal Money Value Transfer Systems (MVTS)

Systems like Hawala or Fei Chien (飞钱) - are commonly used mechanisms for transferring financial value outside of the formal banking system. While most MVTS businesses serve legitimate purposes, they are also vulnerable to abuse by criminals seeking to launder proceeds from crimes. Because MVTS often operate without formal licensing or recordkeeping, they can enable the movement of large sums of money without leaving a paper trail. MVTS are also commonly used to move money across borders, allowing for individuals to move money abroad without regulatory or FIs oversight. Notably, traditional banking access is limited in remote, under-regulated regions – particularly parts of East and Central Africa – where cash-intensive operations are common. Since MVTS are already widely used for legitimate transactions in these areas, criminal use of these systems may be less likely to trigger immediate detection.

Illegal mining case study

According to FATF, gold illegally mined in the Democratic Republic of Congo is often smuggled into neighbouring countries like Rwanda and Uganda, then exported to refiners in the Middle East or onward to Asia. Payments to smugglers are often made through informal remittance networks once intermediaries have secured the sale, allowing criminals to bypass formal banking channels and obscure the gold’s illicit origin.

Shadow banking

Shadow banking entities and activities can include a wide range of FIs and instruments, such as the use of peer-to-peer lending or other fintech platforms, private investment funds, and limited-purpose finance companies that are operating outside the scope of standard banking oversight. These entities may not be subject to the same customer due diligence or reporting requirements as regulated banks, making them attractive for those looking to obscure the origin or destination of criminal proceeds.

Round-tripping

Criminals move illicit funds out of a country through a web of layered transactions involving shell companies, intermediaries, or informal financial networks. The money is then reintroduced into the country of origin, typically in the form of foreign direct investment, giving it a veneer of legitimacy. This method can be especially attractive because it can allow criminals to take advantage of tax incentives as well. For example, illicit proceeds could be laundered through offshore accounts and then later used to purchase real estate in the origin country or shares in a legitimate business under the guise of foreign portfolio investment.

Purchase of High-Value, Easily Movable Assets

Criminals engaging in environmental crimes often seek to convert illicit cash proceeds into high-value, portable assets, such as jewellery, luxury goods, and art. These assets serve multiple purposes: they store value, facilitate cross-border movement, and are often less scrutinised by regulators and FIs, especially in regions with weak oversight. These purchases may take place through layered transactions using front companies or third parties, further obscuring the original source of funds. FIs should remain aware of clients purchasing high-value assets, especially if inconsistent with a customer’s profile, as the purchasing funds could be the proceeds of a crime such as illegal mining or wildlife trafficking.

Digital assets

While still a less commonly used mechanism, cryptocurrencies and other digital currencies are increasingly used by criminals engaging in illegal mining, wildlife trafficking, and other environmental crimes. These currencies appeal to criminals due to their decentralised nature and ability to facilitate fast, cross-border transfers without the same financial oversight as banks. Criminals use various methods to launder assets through crypto, such as using crypto mixers or tumblers (which break large transactions into smaller units and blend them with other users’ funds), chain hopping (where illicit actors rapidly transfer assets across multiple blockchain networks), and peer-to-peer exchanges or unregulated exchanges.

Environmental crime alert

There have been reports of proceeds from illegal mining or natural resources trafficking being converted into crypto using peer-to-peer platforms.

Similarly, individuals may use cryptocurrency to purchase ivory or other illegal wildlife products through online marketplaces or encrypted messaging platforms. The growing shift of the illegal wildlife trade to online channels has made such transactions increasingly common and difficult to detect.

Digital assets

Cash-intensive businesses (e.g. restaurants, construction firms, agricultural suppliers) are often exploited to move and disguise illicit proceeds. These businesses, which typically generate large volumes of physical cash from legitimate activity, can serve as convenient fronts to integrate illegally earned money into the formal financial system.

Deforestation and illegal mining alert

Multiple cash-intensive businesses may be set up in proximity to at-risk zones, such as areas undergoing rapid deforestation or resource extraction. One common typology involves channelling large cash deposits from a cash-intensive business to beneficiaries operating in regions known for illegal mining or other forms of illegal land conversion. These payments may appear to be legitimate business expenses or supplier payments, but in reality, they are used to fund or launder proceeds from activities such as licensed mining or illegal timber extraction.

In another example, a construction business operating near an illegal gold mining region may export exaggerated cash sales to account for deposits of criminal proceeds, or a transport company could serve as a front to move both physical commodities and funds linked to illegal mining.

Transactional red flags

Account and Transaction Patterns

  • Suspicious Account Activity

    • A single bank account used by multiple businesses

    • Circular transactions between local bank accounts

    • Circular transactions between company and shareholder accounts without clear business reason

    • Rapid movement of funds through multiple accounts, currencies, or institutions

  • Unusual Payment Methods

    • Travelers' cheques in precious metals/stones trade

    • Round-dollar wire transfers (indicating layering)

    • Vague transfer labels like "consulting fee" unrelated to actual business

  • Structuring Behaviours

    • Deposits just below reporting thresholds

    • Multiple small cash deposits followed by withdrawals

    • Multiple deposits in various locations when account owner resides elsewhere

Illegal mining case study

From 2010 to 2017, Miami-based NTR Metals laundered over US $3.6 billion in illicit gold proceeds through circular wire transfers and cash structuring involving shell companies. Transactions were often labelled only “gold purchase” just under the US $10,000 reporting threshold, and funds were layered via accounts in Switzerland, Chile and Dubai within hours of placement.

Geographic and Jurisdictional Indicators

  • High-Risk Location Patterns

    • Large cash withdrawals from institutions in remote areas near illegal mining or conservation zones

    • Significant cash payments from high-risk jurisdictions for illegal mining/wildlife trade

    • Transfers between free trade zones or countries with weak beneficial ownership transparency

  • Cross-Border Movements

    • Deposits from foreign companies followed by immediate transfers to other jurisdictions

    • Escrow-type transactions with same beneficial owner for cross-border shipments

    • Multiple MVTS transfers in regions known for environmental crime

Deforestation and land conversion case study

In October 2024, Interpol dismantled two criminal networks across Paraguay–Brazil–Argentina. These syndicates logged and trafficked timber using forged permits, and laundered proceeds by cycling them through fake companies in the Tri-Border. They then parked illicit funds in real estate and offshore holdings.

Business and Corporate Red Flags

  • Newly Established Companies

    • Recently created companies with rapid income accumulation but little visible economic activity

    • Recently activated dormant companies with income inconsistent with stated activities

    • Third-party created export companies and bank accounts

Illegal wildlife trade case study

Between 2012 and 2017, an Indonesian frozen fish exporter used structured payments, offshore layering, and third-party transfers to conceal illegal pangolin-scale exports to East Asia. The exporter showed revenues of less than US $100,000 in its first year but processed US $90 million within five years. Investigations revealed dozens of intermediary bank accounts in false names that handled 129 transfers to 23 foreign “suppliers” that never appeared in customs records

  • Sector-Specific Indicators

    • Frequent payments from mining/logging companies to unrelated beneficiaries

    • Increased transactions between non-licensed entities and equipment companies

    • Companies paying employees exclusively in cash/commission creating incentives for illicit activities

  • Supply Chain Anomalies

    • Aberrant bank activity in natural resource supply chain companies

    • Frequent buying/selling of shares in companies holding resource permits

    • Sudden economic activity increases in rural/isolated zones

Cash-Intensive Business Indicators

  • Volume and Pattern Alerts

    • Large cash transfers from gas stations to mining/logging source areas

    • Unusually high cash turnover or inconsistent flow patterns

    • High transaction volumes at businesses near at-risk zones

    • Cash-intensive businesses with rapid income accumulation

Deforestation and land conversion case study

Investigators found unauthorised ranchers inside Brazil’s Apyterewa Indigenous Territory moving 12,000 head of cattle through “clean” farms before sale to meat-packers JBS and Frigol, an operation marked by sudden spikes in livestock transfers and falsified transport permits that masked payments to unrelated beneficiary farms. Such “cattle-laundering” is a textbook supply-chain anomaly pointing to third-party risk and rapid, short-lived bursts of economic activity in a remote zone.

Digital and Alternative Payment Methods

  • Cryptocurrency Indicators

    • Large/frequent crypto purchases via peer-to-peer platforms

    • Use of crypto mixers, tumblers, or chain hopping

    • Unregulated exchange usage

  • Third-Party and Intermediary Risks

    • Service intermediaries (accountants, brokers, trust providers) obscuring fund controllers

    • Payments from unrelated third parties with no apparent business relationship

    • Repeatedly amended letters of credit without reasonable justification

Temporal Patterns

  • Timing Indicators

    • Sudden onset and cessation of payments within a short duration

    • Brief operational periods for companies registering significant exports

    • Immediate cash withdrawals following transfers from smelter countries to source countries

Illegal wildlife trade case study

Between 2018 and 2022, a South African rhino horn syndicate laundered proceeds from illegal rhino horn sales. Following each poaching run, the syndicate deposited large sums of cash exclusively into local accounts, which were used to purchase properties and vehicles within days, with account activity spiking briefly and then going dormant – indicating brief operational periods and high-volume cash turnover.cattle through “clean” farms before sale to meat-packers JBS and Frigol, an operation marked by sudden spikes in livestock transfers and falsified transport permits that masked payments to unrelated beneficiary farms. Such “cattle-laundering” is a textbook supply-chain anomaly pointing to third-party risk and rapid, short-lived bursts of economic activity in a remote zone.

Geographic/ jurisdictional indicators
Sectoral indicators
Financial transactions & services indicators
Client profile indicators
Transportation & trade-based money laundering indicators
Corruption indicators
Human rights indicators
Reporting regulatory requirements & best practices for FIs

The Environmental Crimes Financial Toolkit is developed by WWF and Themis, with support from the Climate Solutions Partnership (CSP). The CSP is a philanthropic collaboration between HSBC, WRI and WWF, with a global network of local partners, aiming at scaling up innovative nature-based solutions, and supporting the transition of the energy sector to renewables in Asia, by combining our resources, knowledge, and insight.

Back to top