Is this money laundering?

James07

James07

James07

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A friend of mine transfers money to her mothers bank account a couple of times a year, approx 60-70% of her yearly salary.

This is to help prevent her spending it and has done it for over 5 years as eventually she wants to buy her own house, but today a call was made from the bank regarding investigation into money laundering.

She's worrying and I said I'll try seek some free advice for her :)
 
James07 said:
A friend of mine transfers money to her mothers bank account a couple of times a year, approx 60-70% of her yearly salary.

This is to help prevent her spending it and has done it for over 5 years as eventually she wants to buy her own house, but today a call was made from the bank regarding investigation into money laundering.

She's worrying and I said I'll try seek some free advice for her :)
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No. There's nothing wrong with that. Just explain that to the bank and make sure she has support for where the transactions come from (i.e. her own bank statements).
 
It is somewhat odd that the bank called and mentioned an investigation into money laundering as that is a criminal offense with a rather hefty prison sentence.
 
If the money is already earned and taxed then no, she may have triggered an automated bank ceiling though hence the call. If there's a paper trail, which there should be if its been paid in to her account as salary then paid out to her mum then there's nothing to investigate.
 
:/ No. The only thing i can think of is it may be viewed as a 'gift' which is only a consideration for inheritance tax purposes. That is, assuming the daughter dies before the mother and leaves her above the IT threshold! You can 'give' 3k per year. Above that goes it goes in to the IT accumulator, but is wiped out after 7 years.
 
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Banks will ask all sorts of questions regarding money transfers and cash deposits over a certain amount will also trigger a "where did that come from" response.
 
RDM said:
It is somewhat odd that the bank called and mentioned an investigation into money laundering as that is a criminal offense with a rather hefty prison sentence.
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They probably just noticed she transfers large sums of money to the same person often.

It got flagged by the system as potential fraud.
They just want to find out whether the money is being laundered or not.

If banks don't actively try to find/stop fraud then they get fines

http://www.bbc.co.uk/news/business-25864499
The UK arm of South Africa's Standard Bank has been fined £7.6m by the Financial Conduct Authority for "serious weaknesses" in its anti-money laundering controls.
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okay they got a tiny fine but in the last few years HSBC were trying to fight a fine in america for something like 1.2-1.9 billion USD because of all the money laundering that happened with their bank


As long as the money has been properly taxed and gone through the system then the OPs friend will be fine.

If it's really money she is trying to hide away from the government then she won't be.
Has she ever told the government she has less savings than she really does because it's all in her mums bank? for student loans or something
 
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BunnyKillBot said:
:/ No. The only thing i can think of is it may be viewed as a 'gift' which is only a consideration for inheritance tax purposes. That is, assuming the daughter dies before the mother and leaves her above the IT threshold! You can 'give' 3k per year. Above that goes it goes in to the IT accumulator, but is wiped out after 7 years.
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I'll pass this on, may need to be taken into consideration for her :)

arknor said:
They probably just noticed she transfers large sums of money to the same person
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Thats what I suspected
 
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No of course it isn't.

All they will do is confirm the origins of the money transferred and the reasons for the transfers.
 
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Its just because it's a transfer of large sums that triggers the anti-money laundering checks. Though in my experience they aren't very good checks.
 
If your friend has done nothing wrong then she has nothing to worry about, so long as the income was not procured through criminal activity and if it hasn't, all due income tax has been paid.
 
RDM said:
It is somewhat odd that the bank called and mentioned an investigation into money laundering as that is a criminal offense with a rather hefty prison sentence.
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Odd indeed that they mentioned money laundering. That is called 'tipping off' and carries a sentence itself.
 
To Launder money first the money has to be Dirty, Her money is not, Chill Pill given.
 
arknor said:
They probably just noticed she transfers large sums of money to the same person often.

It got flagged by the system as potential fraud.
They just want to find out whether the money is being laundered or not.

If banks don't actively try to find/stop fraud then they get fines
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I used to work in financial services so I know the regulations a little, calling about fraud I can see, but specifically calling about money laundering is something you are not meant to do. It is an offense known as "Tipping off" and is punishable by up to five years in prison.
 
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