I was just chilling and my mind began to wander and it finally caught something really dark. Let's talk about POS money laundering strategy and the steps involved.

For those who don't know what money laundering means, according to Investopedia, "Money laundering is the illegal process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process 'launders' it to make it look clean".

It's so easy to launder 1 million naira a day in Nigeria through POS business without losing a penny from that 1 million. Normally, money laundering involves losing a fraction of the money. But not this method.

All you have to do is to:
1. Setup a business.
2. Use that business to open a business bank account.
3. Use that account to acquire 10 POS machines.
4. Open 10 POS shops and employ 1 person in each POS shop.
5. Give each of them 100k a day. That will be 1 million for 10 of the shops.
6. Charge 5% on each withdrawal.
7. They must not accept cash deposit.
8. Within hours, that 100k will finish and they will close shop for the day.
9. Congratulations, you now have CLEAN 1 million in your business bank account. Also, you have made extra 2.5% (let's assume, worst case scenario, bank charges take 50% of the 5% you charge per withdrawal).

Total profit of 25k. Each shop made 2.5k. Assuming 6 working days, in a month each shop will make 2.5k times 24, which is 60k. That 60k will be used as running expense for that shop.

I stand to be corrected, but there is no money laundering strategy more consistent, simpler and faster than this, ANYWHERE in the world. You can easily scale the operation up to launder more funds per day by deploying fronts. I doubt it will be difficult to launder 10 million a day with this method.

Welcome to Nigeria. I won't be surprised to hear that some people are currently doing this in Nigeria. I hope CBN, EFCC, etc see this and block the loophole.

If you know of any simpler, easier and faster money laundering strategy, kindly comment it.

There is another twist/flavour to this same POS money laundering strategy.

Instead of setting up the POS businesses, one can choose to fund 10 independent POS businesses with 100k raw cash each, every day (1 million total), ask them ask them to keep the daily profit, and send the 100k to a designated bank account at the end of every working day.

Since the money is entering the bank from different sources, the bank wouldn't flag the account, right? Exactly. They keep operating under the radar.

I bet there are hundreds of POS operators seeking for how to source cash at no cost. That's where money laundering comes in

Guy rest

Thatedoboy98:
Guy rest

Do I know you? Don't derail this thread

These recent happening only proves POS are doing more damage and helping no one and henceforth should be banned!!

TRUE.
At Aduwawa in Benin City this morning, at a POS shops, maximum withdraw was 1k...charges, N200. Old N100 and N50 notes.

visaclick:
These recent happening only proves POS are doing more damage and helping no one and henceforth should be banned!!

imagrg:
TRUE.
At Aduwawa in Benin City this morning, at a POS shops, maximum withdraw was 1k...charges, N200. Old N100 and N50 notes.

POS has to be banned because they are fueling money laundering

visaclick:
POS has to be banned because they are fueling money laundering

No one even asks where the POS operator got his cash from. He could have gotten the cash from an armed robber, politician, drug dealer, kidnapper, or even terrorist.

Cash is very sensitive except in Nigeria.

imagrg:
TRUE.
At Aduwawa in Benin City this morning, at a POS shops, maximum withdraw was 1k...charges, N200. Old N100 and N50 notes.

That's 20% profit.

I'm more concerned about the money laundering part of those transactions

Those monies in the POS agents wallet has to be transferred into an account. If it is a politician that owns that account, he will have to give account on how he got the money given that office holders are not allowed to run private business. So, no office holder can open any business in his name and put such huge amount of money in it. That is one.

If politicians uses human proxies to open the business, they may escape the consequences of corrupt act if the business handler is upright. but the economy gains as the money is invested in something meaningful and is both in circulation and also taxed unlike when it is stacked somewhere and is unproductive.

POS business is not the problem. It will be faced out very soon as more business banks are licensed and charges are minimized.

The only problem we have now is civil servants. By civil servants in this regard I mean CBN and it staff. They can not mobilize to handle the responsibilities of receiving the old notes and they cowardly pushed it over to Deposit money banks without any stipend to the staff bearing the burden and no plans to provide human resources from their idle staff to assist in this exercise but are quick to sanction any error. Now that they have mandated Commercial banks to bear this burden, the people are going to still keep the old note in circulation and this rush to deposit this same old notes is going to be re-visited again and again because of their being irresponsible and lazy. So bad they kept making corrupt politicians seem right to the public.

Brilliant...nice and easy.