An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an...

The red flags that would be an indicator that activity is connected to a corruption/bribery typology are large checks issued to various individuals with the memos noting “gift”, “thank you”, “favor” (A) and negative news found on the customer related to government-issued violations for safety (B). These red flags suggest that the customer is involved in paying or receiving bribes or kickbacks to or from government officials or other parties in exchange for favorable treatment or contracts. These red flags are consistent with some of the indicators of corruption/bribery identified by ACAMS1, such as:

Payments made to or from third parties that are not directly related to the business

Payments made to or from high-risk jurisdictions or sectors

Payments made with vague or incomplete descriptions or justifications

Negative news or reputation of the customer or its associates

The other options are not as relevant or indicative of corruption/bribery as options A and B. Checks issued to an unrelated entity referencing “rent” and “utilities” in the memos © could be a legitimate business expense or a sign of other types of fraud or money laundering, such as tax evasion or shell company schemes. Multiple daycare locations with no active business operations or related account activity (D) could also be a sign of other types of fraud or money laundering, such as embezzlement or front company schemes. The same beneficial owner owning several daycare centers in different locations (E) could be a normal or legitimate business practice, depending on the size, location, and profitability of the centers.