Venezuelan Laundering Scheme: Bank Handled $20 Million

Aug 26, 2019

You might have heard about the New Jersey bank that handled $20 million for a firm connected with a Venezuelan laundering scheme, mightn’t you? If you’re interested in more details concerning the case and are looking for a reliable payment processing company, you’re at the right place: just keep on reading this article.

Venezuelan Laundering Scheme

First of all, let’s see how money laundering defined. So, it’s the process of obtaining large funds through illicit means, including drug trafficking or terrorist funding, which seem to originate lawfully. The funds coming from criminal activities are considered dirty. The process is called “laundering” because it makes these funds look clean.
A 2018 survey from PwC showed that global money laundering transactions made up approximately $1 – $2 trillion on an annual basis. This represented about 2% – 5% of global GDP. Today, to prevent money laundering schemes from happening, international efforts must be put.

Criminals apply a large variety of money laundering techniques that help them show the unlawfully obtained sums aren’t dirty. What’s more, internet banking and cryptocurrencies have facilitated the process of money transfer and money withdrawal to a great extent. So, these illegally obtained funds can remain undetected quite easily.

When it comes to the Venezuelan laundering case, by July 2018, according to federal prosecutors in South Florida, Gustavo Hernandez Frieri, a Colombian American “skilled money launderer” in Miami, received a $5 million wire in February 2017. The money was obtained through the Cayman fund’s account at City National. Those funds came from PDVSA, a Venezuelan state-run oil firm.

If you’re a legitimate company involved in online payment transactions, you must be looking for a secure and trustworthy payments company to apply to. Working with a reputable payment processor like will help you take your eCommerce business to the next level without running into obstacles.

EMB, a BBB-accredit credit card processing company and alternative online lender, is ranked #1 high risk processor in the U.S. Moreover, is listed as an A company by Card Payment Options and as the “Best All-Around High Risk Merchant Account Provider” by ValuePenguin., in partnership with Verifi and Ethoca, offers unmatched fraud prevention and chargeback mitigation services to keep you away from cases like the Venezuelan laundering scheme.

Anti-Money Laundering (AML) Efforts Worldwide

Banks and other financial institutions need to constantly innovate and develop strong AML strategies so to never stay behind the tactics money launderers are using. In 2018, U.S. financial services spend nearly $25.3B on managing laundering risk.
When it comes to the issue of money laundering in the world of cryptocurrency, criminals are attracted to this type of currency because of the anonymous, peer-to-peer value transfer.

The interesting thing is that though the cryptocurrency market is smaller and less mature than the traditional stocks-and-bonds markets, the criminals targeting it are among the smartest worldwide. What’s more, their number is growing all the time.

On a side note, according to a July report by Reuters, Japan’s government was working on setting up a system like SWIFT for cryptocurrency exchanges to fight money laundering.

In today’s world of the internet and high technologies, AI (artificial intelligence) and advanced analytics have brought about incredible changes in the financial industry. Today, anti-money laundering efforts are much more important than ever before.

According to a recent study from CipherTrace, a cryptocurrency intelligence company operating in Silicon Valley, thieves and scammers obtained $4.26 billion from cryptocurrency exchanges, investors, and users during the 1st half of 2019.

Thus, investing in AML enables financial institutions to enjoy such competitive advantages as:

  • Increased efficiency
  • Improved customer experience
  • Scalability
  • Capacity to adapt to new regulations more easily
  • Fewer reputational risks
  • More top talent attraction

To sum up, anti-money laundering (AML) has been a hot-button topic for many years. By successfully hiding the illegal origins of cash, online fraudsters are causing harm to both financial institution and society. Thus, anti-money laundering efforts to eradicate cases like the Venezuelan one are much more important than they were in the past.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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