Trade Based Money Laundering (TBML) is one of the most complex and elusive forms of financial crime facing global markets today. At its core, TBML is the process of disguising the proceeds of crime and moving value through international trade transactions, making illicit funds appear legitimate. Unlike traditional money laundering, which often relies on banks or casinos, TBML exploits the vast and intricate world of global commerce.

How Does Trade Based Money Laundering Work?

Criminals use a variety of schemes to move illicit money across borders. Common TBML techniques include:

• Over-invoicing or under-invoicing: Criminals artificially inflate or deflate the value of goods on invoices, allowing them to transfer excess funds or hide profits.
• Multiple invoicing: Issuing several invoices for the same shipment to justify multiple payments.
• Misclassification of goods: Labeling goods incorrectly to avoid detection or customs duties.
• Phantom or ghost shipments: Creating paperwork for shipments that never actually occur, making it appear as though goods have been traded when only money has moved.
• Use of shell companies: Layering transactions through multiple entities to obscure the money trail.

Some notorious examples of TBML occurred when bulldozers were shipped to Colombia at $1.74 each, or when prefab buildings were sold to Trinidad at $1.20—per-unit prices that were far below market value, clearly designed to move money rather than goods.

Why Is Trade Based Money Laundering So Dangerous?

TBML not only launders criminal proceeds but also undermines the integrity of global trade, distorts markets, and costs governments billions in lost revenue. The Financial Action Task Force (FATF) estimates that the global value gap from trade mis-invoicing reached $8.7 trillion between 2008 and 2017.

Facing Trade Based Money Laundering Allegations?

Federal prosecutors aggressively pursue TBML cases using statutes like 18 U.S.C. 1956 and 1957. Convictions can mean up to 20 years in prison per count and massive fines. If you or your business is under investigation for trade-based money laundering, early intervention is critical.

Don't wait. Contact Sigal Law Group today for a free consultation. Our experienced criminal defense attorneys can help you understand your rights, build a strong defense, and protect your future.