Large and organised criminal enterprises, or individuals who are massively involved in financial crime, face a major problem - they end up with huge amounts of cash, which they need to hide in order to avoid investigations by legal authorities. To deal with this problem, they create ways to conceal money obtained from illegal activities and get it back in a ‘clean’ way.

This is called Money Laundering - the process of making the proceeds of crime appear legitimate.

In this article, we’ll tell you more about the money laundering process in general and dive deep into this topic to discuss the primary reasons people launder money, how it works, and look at some real-life examples.

The illegal process of ‘cleaning’ large amounts of money made as a result of criminal activity is called money laundering. This activity can be something like drug trafficking, or funding terrorism. Essentially, money obtained from criminal activity is considered dirty, and the money launderers are those who try to make it look clean - knowingly or unknowingly. 

Money laundering is a serious financial crime and most companies in this field have Anti-Money Laundering (AML) policies to prevent it. It can have huge effects on various industries such as banking or financial services. No one knows the total amount of money laundered yearly, but various organisations have estimated it to be in the hundreds of billions of dollars. 

People have been finding ways to launder money ever since it became a necessity. With the help of money laundering, criminals make sure that crime pays. 

The idea is simple - money launderers are given money with criminal origins. They need to use any way possible to make it seem legitimate and within the legal economy. When it comes to big finance, criminals usually have one of three things in mind: investing, hiding, or using it immediately. And from an investigator's perspective, they need to follow the money to understand its origins. That's why criminals want to move it further and faster so that it can’t be followed. This is the main reason why money laundering takes place. 

Most money laundering strategies and techniques share three basic steps. These are Placement, Layering, and Integration. Each one of these steps can be extremely complex and complicated because of the activity involved. Let's break them down:

Placement is the stage where the 'dirty' and illegal money is placed into legitimate financial systems. This way, financial criminals move the cash from its source after being involved in corruption. At this stage, the money is being 'washed' to prepare the money laundering activity. Usually, they convert cash into assets to make it seem legitimate.

Layering is the second stage of the money laundering process, where complex transactions take place. It usually involves offshore transactions, and the goal is to distance the funds from their origin further. One way that people do it is to purchase tradable property, such as expensive cars or real estate. This stage helps criminals to hide the original source of illegal money. 

Integration is when the 'dirty' money is already absorbed into the economy, benefiting the original criminal. They might make an investment into a legal business or start a charity with these finances and pay themselves a huge amount in salaries. Integration, in this case, has to be very carefully done from legitimate sources to create explanations for the money's origin.

Money Laundering is the process of making crime proceeds legitimate. Different methods and techniques have been developing throughout the centuries to achieve this process successfully. All three steps - placing, layering, and integration have continued to adapt to evolving defences.

The classical process of money laundering can include:

Structuring large amounts of money into small pieces with bank transactions

Making investments in high-value commodities such as gold

Additionally, criminals are now using advanced technologies to accomplish their goals and launder money online. Methods change, but the process always stays the same. 

There are several techniques and methods that are commonly used to launder significant amounts of money. Of course, it requires a lot of effort, observation, and attention to detail because more and more solutions are being implemented to forbid such activities. However, classical techniques still work on a large scale. These can include:

Laundering money using virtual currencies: Cryptocurrencies such as Bitcoin, Etherium, or others, are one of the most convenient methods to wash money. This is because they are not connected to a person's identity and depend on the private key attached to the account. Financial institutions have concerns about the association of crypto coins with cybercrime and money laundering.

Anonymous payment systems: There are different payment methods such as prepaid gift cards, prepaid debit cards, and more. People can use these to purchase any manner of items in a completely anonymous manner. It doesn't require revealing the identity of the person, which can help in the money laundering procedure.

Scamming via business emails: The main target, in this case, are businesses working with foreign suppliers and doing wire transfers. Using phishing methods, criminals compromise a company's email accounts to conduct unauthorized transfers. 

As we mentioned previously, there are various methods to make dirty money seem clean. In almost every case, you can see the similar steps that money launderers take to make this happen. The structure and length of these procedures often depend on the specific case. 

Government officials and financial institutions have been observing these kinds of actions closely to showcase and detect money laundering activities. Here are the most common types of money laundering which have been encountered:

This is money laundering that works on a global scale. The team required for this consists of a group of people based in different parts of the world and a centralised money manager who drives all the transactions. They can receive, hand over, and transfer criminal requests for a specified fee. This process is easy to understand but hard to execute - the basic idea is to have a distributed network. The owner of the ‘dirty’ money contacts the manager and explains how much money he needs to be laundered.

Professional Money Launderers use Proxy networks. This group of people supply a type of banking service to the criminal group. The core objective is to move a client’s money to the final destination through complicated financial transactions. It can be extremely hard to achieve this, which is why they tend to use multiple shell companies to achieve this. The only goal of these companies is to redistribute and mix funds from various sources.

Before the digital era, it was hard to move funds from one place to another - there was always a risk that people would disappear with the money. It’s now much simpler to send money over a long distance thanks to technology. Professional money launderers have grabbed this opportunity to take their operations online, bringing a whole set of new risks to their lives, as it’s easier for financial institutions and banks to monitor online transactions and notice suspicious activities. This is why operations like the Dark Web launched to make it harder for officials to track transactions. 

This is the most modern type of money laundering. Cryptocurrency, as a definition, is a decentralized type of virtual money. It is becoming widely accepted in many places worldwide, increasing the threat of money laundering. It is hard to control the origin or destination of funds due to the high-level encryption implemented in the system. This motivates professional money launderers to exploit every opportunity to use them, and there are lots of real-life examples of this.

As we already saw from our examples above, it is very common to launder money to obscure funds generated by illegal activity. There is a whole list of use cases where individuals apply the most common techniques and methods, and launder money successfully. The most common industries for those activities are drug trafficking, embezzlement, arms trafficking, and more. 

Usually, money laundering cases hardly ever make it to the national headlines. Even though there are lots of operations happening every year, the general public still doesn’t hear much about it. However, a search on any news site will hand you a myriad of interesting stories, such as the case of a Nigerian influencer who admitted money laundering earlier this year, the UK’s FCA taking action against NatWest for failures in their prevention of money laundering, and the incredible story of OneCoin, which became an enthralling podcast series. 

Effective money laundering schemes can have social, political, and economic consequences. It has negative effects on businesses and societies. Depending on the scale of crime, it can destroy the economy, weaken the banking sector, and erode trust in new technologies like cryptocurrency. This is why government sectors and relevant institutions should use every method to prevent these kinds of activities. Beyond this, private businesses have also been seriously harmed by money laundering operations. 

It is essential to understand all the consequences of these processes in both governmental and private fields. It affects the country's economy and social well-being. Money Laundering activities undermine the legitimate private sectors, causing economic distortion and instability, and help companies face the loss of revenue and reputation. 

The United States Act of Congress came up with the Money Laundering Control Act of 1986, which made money laundering a federal crime - it was the first time money laundering was truly criminalized. The act consists of two main sections - the first prohibits individuals from engaging in any kind of transaction generated from a specific crime. The law also requires people to understand the source and confirm ownership or control of the funds. The second section prohibits individuals from spending more than $10,000 derived from  specified unlawful activities. This carries more minor penalties than money laundering.

Different countries have different measures to tackle money laundering. As we saw, it can have many negative effects on a country's economy, and social well-being. So, governments should look to fit their punishment to the crime. For example, in the UK, individuals can face a jail sentence of up to 14 years, or a large fine. It can also depend on the amount of money involved. In the United States, a person can get a sentence of 20 years in prison and fines of up to $500,000 or twice the value of the property involved in this operation. 

In the United States, money laundering was not officially recognized as a federal crime until 1986. Before that, the government needed to prosecute a related crime depending on each case. In that year, the Money Laundering Control Act came into force and then they could confiscate wealth by demonstrating that concealment had occurred. It had some positive effects on preventing major criminals from activities like drug trafficking.

Preventing money laundering with verification

It is important to fully understand the money laundering process and find the best methods of prevention, to fight potential damage to governments, financial institutions and wider society. Fortunately, most countries have a set of laws, policies, and regulations that financial institutions, and companies involved in money handling, can use to monitor their clients actively and prevent financial crime. They do it with the help of Anti-Money Laundering (AML) regulations, which target a wide range of activities. 

Various companies, banks, and financial institutions implement anti-money laundering compliance programs to avoid risks and do their job in the safest way possible. The starting point of this compliance in the digital world is online identity verification. It is crucial to run AML checks when welcoming a new client because companies are responsible for doing everything to discover money laundering tactics and report them properly. That’s why it is essential to choose the right solution to help your company achieve this.

Here at Veriff, we work hard to build trust online and make the digital world safer with the tools we are building daily. Have a look at our AML & KYC Compliance Solution that can help your team prevent suspicious activities, fight fraud effectively, and stop money laundering before it happens.

We look into the practice of money laundering - what it is, how it's done, and what are the consequences for money launderers and those who enable them.

Our guide defines money laundering, how it works, types of laundering, sentences & how to prevent it with verification.

In this post, we will share our experience in developing a custom Flutter plugin for Veriff’s mobile products.

Flutter is Google's UI toolkit for building beautiful, natively compiled applications for mobile, web, desktop, and embedded devices from a single codebase.

Flutter plugins are Dart packages that contain an API written in Dart language which combines multiple platform-specific implementations. Plugins can be written for Android (Kotlin or Java), iOS (Swift or Objective-C), web, macOS, Windows or Linux, or any combination of these.

Flutter packages are modules that contains only Dart code. Flutter plugins on the other hand, are  packages with a difference. Plugins contain both Dart and platform specific code (Kotlin, Swift, etc.). You can create a Flutter plugin with the following command:

Please refer to Flutter’s official documentation for more information about creating a Dart package.

A Flutter plugin structure has these folders:

lib - contains Flutter code in .dart files

ios - contains iOS platform code written in Swift or Objective C

android - contains Android platform code written in Kotlin or Java

example - an example Flutter app that could demo the usage of the plugin; the example app is optional but highly recommended as per community guidelines

Apart from these folders there will also be some mandatory files like:

README.md - a readme file with details about the plugin

pubspec.yaml - a yaml file containing metadata about the plugin, the information in this file will be used while publishing also

Communication between Flutter and native platforms 

The Flutter plugin will obviously need to communicate with the corresponding native platform. Instead of using code generation or reflection for communication, Flutter uses a simple message passing through a channel to achieve communication to and from native platforms. You can use a MethodChannel from Flutter side to communicate with the native platforms which could be received using a FlutterMethodChannel in iOS and a MethodChannel in Android. An important thing to note is that even though Flutter sends message calls asynchronously, the channel method invocations must be done in the platform's main thread.

Alternately if you are comfortable with using only Objective-C for iOS and Java for Android you could also consider using the Flutter package Pigeon for sending structured type-safe messages using code-generation.

The Flutter MethodChannel uses a standard message codec and efficiently sends simple JSON-like values like int, double, string, list, map etc. The full list of supported types and their respective converted platform types can be found here. 

The supported list of data types and their equivalent platform conversion at the time of writing is as below.

For debugging purposes Flutter provides tools.

You can use flutter doctor to check all installed tooling for Flutter or flutter analyze -d <DEVICE_ID> to analyze your source code. Keep in mind that you should replace DEVICE_ID with the device’s ID that you are debugging with.

You can run the example app with your plugin by running this command:

Depending on the type of device (Android/iOS) connected to your computer it will run the corresponding platform version.

Once your plugin is ready and tested it should be published to pub.dev so that other developers can use it in their projects. Before publishing, you have to make sure that your pubspec.yaml, README.md and CHANGELOG.md files are filled correctly. Some fields to double check in the pubspec.yaml file are: 

name: This will be the name of your plugin that 3rd party developer will be using to install your plugin

description: A human readable short description about your plugin

environment: Since Dart 2 was released, the environment value specifies the Dart and Flutter version the plugin depends on, using the sdk and flutter child values

Detailed descriptions about other fields can be found here 

In order to publish the plugin you need a developer account in pub.dev. You can make a personal account or you can make a verified account for a domain. The steps to create a verified account can be found here. Once you have filled in the required extra files and made a developer account you are ready to publish.

One important aspect about publishing a plugin is that publishing is non-reversible. This is to make sure that the developers who are depending on your builds do not have to deal with a broken build if you un-publish your plugin. Hence pub.dev policy does not allow un-publishing your plugins. 

Since publishing is non-reversible you need to do a dry run of the publish to see that everything is ready for publishing, to check if everything is correct without actually needing to publish. You can do a dry run by running this command:

Once you have made a dry run and confirmed everything is correct you can do the actual publishing by running the publish command:

Once you run the publish command flutter will log a link in your terminal to login to your pub.dev account, and you’ll need to click that link and complete authentication via your browser. Once logged in and authorised, your plugin will be published and in 10-20 mins will be accessible for third party developers.

🎉  Congrats you have published your Flutter plugin

Once you have published your plugin you can see the plugin score it got from the plugin page in pub.dev. The plugin score is computed considering different criteria like documentation, following dart conventions etc. Along with the score, you will also get pointers on how to improve the score. It’s highly recommended that you try to improve your score as much as possible.

You might want to automate publishing your plugins especially from your CI/CD pipeline. In order to do that you need to create a file in the following path in your CI/CD environment ~/.pub-cache/credentials.json with the following content:

Replace accessToken, refreshToken, tokenEndpoint and expiration with your corresponding values. 

You can find the  values in the  ~/.pub-cache/credentials.json file in your computer after you publish for the first time. And yes, unfortunately this means you have to do the first publish manually from your computer to get them.

Once you have made the credentials.json file in your CI environment you can run the following command from your CI/CD to make the publishing automatically without the prompt to login manually:

Vivekanandan A S - Senior Android Engineer

We delve into how Veriff created our custom Flutter plugin for our different mobile products which we offer our clients.

Vivek, a Senior Android Engineer, and Mert, our SDK Team Manager, delve into how Veriff created our custom Flutter plugin for our different mobile products which we offer our clients.

A technical blog looking at how Veriff created our custom Flutter plugin for our different mobile products which we offer our clients.

Developing a Flutter Plugin for Veriff's Mobile Products

The process of validating a job candidate’s past work history is called Employment Verification. It ensures that the candidate has the appropriate experience to perform well in your company and helps you hire the best additions to your team. Employment verification also helps to reveal gaps in their history or false claims that candidates might have made.

We can look at it as a tool for the pre-employment screening procedure for you to understand which candidates are trustworthy and a good fit for your team. It can have many positive effects in the long run to maintain the growth of your company. 

Employment verification can be an essential step in your hiring procedure. Many applicants try to put false information in their resumes to represent their skills and experience better. This can happen more often than you think - according to surveys, more than half of employers have caught lies on resumes, which means that candidates might not be qualified enough for the job they are applying for. 

There is one clear solution for that - verifying the previous employment of a candidate and making sure that a person is trustworthy from the beginning of the relationship. In this article, we’ll dive deep into this topic and tell you more about Employment Verification. We will discuss the main purpose of this procedure, background checks, and how to get started. 

What is the purpose of employment verification?

Employers can have doubts and concerns about candidates for a particular job, and specifically about the validity of the information on their resume. That’s why they verify employment history to confirm whether the data provided is accurate or not. The work experience needs to meet the position’s requirements. This procedure is considered part of a comprehensive pre-employment screening process that can help you be confident in your decisions when expanding your team with the people you need.

There are several things that employment verification can help you with when it comes to hiring and choosing the right people for your company to accelerate growth. Firstly, it helps you hire qualified candidates more quickly - it speeds up the overall procedure to get appropriate people on board. It also helps to make sure that your candidate’s employment history is accurate, which can build more trust between two parties. Employment verification assists you to confirm that the candidate has the skills and experience required for the role, and mitigates the risk of hiring someone with false credentials. 

So the primary purpose of employment verification is to make sure that you avoid inconsistencies between the information a job applicant gives you and their actual employment history. It is a type of background check that helps you be more confident with hiring and build trust with a potential team member of your company.

How does a background check verify employment?

Usually, employment verification is one of the components of a complete background check. It can also include identity verification, a criminal record check, education history, professional license verification, education history, and more. The goal is to understand and analyze the whole background of a potential employee, which can reveal some valuable insights about the person. 

This can play an integral role in the background check process. Most of the time, employers make their decisions based on the candidate's work experience. They want to know that their potential teammates have held similar jobs in the past, which is the reason why they might want to double-check with previous employers of this candidate. However, employer verification laws state that employers don't have an obligation to respond to calls to verify an individual's employment.  

Agencies providing professional background checks are consumer reporting agencies (CRA) operating under the federal Fair Credit Reporting Act (FCRA). When an employer contacts this institution to do the background check, including employment verification, the employer must notify the candidate beforehand and get approval from them formally. When making a final decision, this information is taken into account. That's why the potential candidate should be aware of it.

Employment verification involves contacting the list of workplaces that candidates have provided to confirm this information's validity. It is important to compare the data written in the resume with reality.

The procedure itself consists of a couple of mandatory steps. Firstly, the service provider takes the information about the candidate provided in the resume and contacts past employers individually. Usually, HR representatives are the ones who verify all the necessary details about your candidate, including responsibilities, job title, and dates of employment. 

Usually, past employers are not limited in revealing information about their past employees, but the government might be strict about it in some places. Also, it might be prohibited to ask about a prospective employee's salary history. On the other hand, there are some cases where companies themselves create policies to restrict the type of information they can disclose. It might be past employees' start and end dates, their salaries, or job titles.

After the service provider is done with the employment verification procedure, you get a report based on the verification background check, and you can carry on with the hiring procedure. This element of hiring has many great outcomes, and it is beneficial when hiring for senior roles because it helps to choose the best candidates for the position. 

Getting help with employment verification

There are several service providers that can help with employment verification. These companies can take over this stage of hiring and go through a couple of steps to ensure that the information is valid. Steps can include checking the data with every workplace on an applicant's resume, using independently obtained phone numbers, confirming the exact dates, and complying with relevant government institutions (if needed). 

Here at Veriff, we work hard daily to build trust in the digital world and create products that can assist you to connect with more honest people. Take a look at our products, and let us help you make your employment verification procedure smoother.

If you're on the search for new employees, you're going to read a lot of resumes. But you can never take them at face value, and it's crucial to know a new team member is trustworthy - which is why you need employment verification. Join us and delve into the process of getting to know potential hires.

What is employment verification? Our guide explains this, why it’s important, how it works, how to get verified & how to get help with employment verification.

Assisted Image Capture Software and Platform

Helping your customers get verified

More sign-ups

Boost speed by 3x

Improve customer experience

An active photo assistant

Simplify your verification flow

We're certified

Add Assisted Image Capture

Try the full package free for 30 days

A complete identity verification platform

Want to learn more?

What is Money Laundering?

Developing a Flutter Plugin for Veriff's Mobile Products

What is Employment Verification?