KUALA LUMPUR: The ease of acquiring mule accounts has made Malaysia a prime target for foreign syndicates seeking to launder their illicit funds to legitimise them.
This is the tactic of the syndicates that will transfer the proceeds of their criminal activities such as phone scams, investment fraud, online gambling, business email compromises, drug smuggling, and so on.
Revealing this, Royal Malaysia Police Anti-Money Laundering (Amla) division head Datuk Muhammad Hasbullah Ali said that the easy availability of mule accounts may be the reason Malaysia is targeted by syndicates for money laundering.
According to him, when syndicates can provide mule accounts to foreign syndicates, they will use this method to channel funds to Malaysia and then transfer them to other countries.
"Countries with less compliance and financial regulations are also identified as targets for syndicates, but this does not mean that Malaysia does not adhere to the compliance set by international bodies.
"In addition, banks that prioritise customer privacy and security are also targeted by foreign syndicates to launder illegally obtained funds," he told Harian Metro recently.
Muhammed Hasbullah said that for the period of 2022, a total of 43 cases involving foreign syndicates in money laundering were detected in this country with losses amounting to RM77 million, while last year there were 87 cases with losses of RM56 million.
"There is no specific type of business registered by syndicates to conduct money laundering activities in Malaysia because any service offered by a company or business can be used to launder illicit funds.
"Most syndicates also use proxies to establish a company or business by providing funds to launch all criminal activities they engage in," he said.
He said companies established by syndicates are set up without any assets, business operations, or services.
"These companies only serve as fake transactions emulating regular businesses to allow the flow of cash into them.
"Payments or funds received will be recycled through several other companies before being used by syndicate members as legitimate funds," he said.
According to him, these syndicates may also use illicit funds for charity activities to elude law enforcement agencies conducting investigations into their activities.
"Some syndicates use social media platforms such as Facebook, Instagram, application X, Telegram, and others to collect funds through donations.
"These syndicates will advertise on social media by placing one or more bank accounts for donation purposes as if the donations are being channeled for welfare purposes outside or within the country.
"Instead, the donations are used for terrorist financing, expanding syndicate networks, or recruiting new syndicate members," he said.
Muhammed Hasbullah said syndicates are also found to establish charity clubs or associations domestically or abroad to be used as a 'vehicle' to channel the movement of illicit funds.
Money laundering activities cause hundreds of millions of ringgit in losses to Malaysia.
Muhammed Hasbullah said that although various steps have been taken by police to address these money laundering syndicates, the number of detected cases of laundering is increasing in line with the rise in crime.
"Most countries lose nearly a trillion dollars each year in cash generated from these money laundering syndicate activities.
"These illicit money laundering activities can cause destruction to a country. The main impact is such as raising crime rates that could threaten national security and safety," he said.
Muhammed Hasbullah said, besides that, it will also affect the integrity and reputation of the business and financial sectors of the country.
"When companies based on crime are rampant in the domestic market, indirectly investors will lose confidence to make investments," he said.
According to him, besides police reports, money laundering activities
conducted by foreign syndicates can be detected through STR/CTR reports provided by Bank Negara Malaysia (BNM).
"In addition to BNM, law enforcement agencies from abroad also provide information to Amla, such as Australia, the United States, the United Kingdom, and Taiwan.
"When information on foreign syndicates is obtained, we will conduct investigations and investigations related to the reported syndicates," he said.
Muhammed Hasbullah added that Amla has been designated as a secretariat for ensuring compliance with both domestic and international standards, tasked with overseeing and navigating the evaluation procedures conducted by international organisations.