A new record was broken in 2023 – a total of around 32,600 money laundering offenses were recorded in Germany according to criminal statistics. The FIU reported over 330,000 suspected money laundering cases in 2022 and the number of reports is increasing year on year. Nowadays, it is not only organized crime that is under the microscope of the Financial Services Supervisory Authority, but also people who recklessly and often unknowingly launder money for third parties. In this article, lawyer Sascha C. Fürstenow explains what this means for them and how they can protect themselves against it.
What is money laundering?
Money laundering is the smuggling of assets into the legal financial and economic cycle that originate from criminal offenses with the aim of concealing the origin of the funds. Since 2021, an “all-crime approach” has applied in accordance with Section 261 of the German Criminal Code (StGB) and includes all criminal offenses, regardless of whether they are felonies or misdemeanors, as predicate offenses for money laundering. This can include fraud, theft and robbery, commercial or gang-related tax evasion, drug offenses and bribery, explains attorney Fürstenow.
One of the best-known methods is, for example, smuggling cash from criminal activities into an account and converting it into non-cash assets. The actual origin of the funds is obscured by blurring the transaction channels by splitting and dispersing the funds. The funds are then used for legal transactions, such as purchases or company investments, in order to return the money to the economy and invest it further.
While fraudsters and money launderers used to rely on these methods, over the years they have developed sophisticated ways to launder money and you as a layperson could play a role in this.
Working as a financial agent and its (criminal) consequences
Financial agents are used to conceal the transaction routes of funds and to provide their own account for money laundering. This structure is also known as “layering” and describes the concealment of the origin of the assets through complex channels in which there are several payment channels between the original principal and the final recipient. The financial agent thus serves as a front man to forward the funds.
How can the activity be recognized? There are various approaches that the perpetrators use to lure victims. In particular, seemingly lucrative job offers on the internet make it difficult for an ordinary layperson to protect themselves from professional money launderers and fraudsters who appear to hire “traders” or “assistants” for crypto trading exchanges. In doing so, the financial agents receive money that originates from illegal means into their account on the trading platform in order to forward it to third parties or to purchase cryptocurrencies or other forms of investment.
Phishing scammers can also access account details, e.g. through fraudulent emails that appear to come from banks. The victims do not recognize the professionally created emails as a fraud attempt and pass on their account details. Money is then transferred to accounts which the victims are then told to pass on to third parties and are allowed to keep a small amount due to the inconvenience. This is how they become involved as financial agents.
However, other methods are also often used, such as online dating sites looking for people who will make their own account available in order to transfer funds, for example because account documents have allegedly been lost or stolen. In this “love scam”, people unintentionally become financial agents without knowing that they are “laundering” illegally acquired funds with their account.
BaFin and the Federal Criminal Police Office constantly warn against acting as a financial agent, as they can be prosecuted for money laundering and the unauthorized provision of financial services.
BaFin has already initiated administrative proceedings against financial agents, as they also receive a commission for their work and therefore offer a financial service on a commercial basis. The persons concerned are also not aware that they are liable to prosecution for reckless money laundering under Section 261 (5) StGB, warns Attorney Fürstenow. Written permission is required for this type of financial transfer service. In such cases, the bank may not only terminate the account, but also impose prison sentences and proceedings by BaFin. Therefore, you should not accept such offers with indifference.
What does the case law say?
The decision by the Higher Regional Court of Munich (19 U 3492/14) may provide some comfort to affected victims. The case involved the defendant unknowingly acting as a financial agent through a job offer. According to the job offer, the task was to scan books. The scanner was to be provided by the apparent employer and an amount of around EUR 9,700 was transferred to the defendant’s account for this purpose. The defendant was to transfer the money to a partner store via Western Union in order to receive a discount for the scanner. The recipient bank, which acted as the plaintiff, demanded compensation from the defendant. The OLG dismissed the claim as there was insufficient evidence of intent or recklessness. The OLG went on to state that initiating business via the internet is not generally frivolous and that the other party’s reasoning was not completely irrational.
Thus, a reckless act, i.e. gross negligence or indifference, must be proven.
What can you do about it?
It is always important to keep your eyes open and be careful on the Internet. No money should be passed on to strangers, especially not abroad. If you suspect that you are dealing with fraudsters, you can report this to the police before acting as an agent. However, if you have been accused of acting as a financial agent or money laundering, it is recommended that you contact a lawyer to avoid criminal and civil law consequences. However, it is also advisable to contact a lawyer to assert civil law claims such as compensation for damages. Case law is generally on the side of those affected and it therefore makes sense to take action against this.
Attorney Fürstenow will be happy to advise you on this and offers a free and non-binding initial assessment of your case in advance.
The legal advice was prepared in German by Ms. Dastan, an employee of FÜRSTENOW Anwaltskanzlei, and professionally reviewed and finalized by Attorney Fürstenow.