Presentation of Case Studies

Christabel Coleiro, Stephanie Camilleri and Martha Mallia Pawley

Enforcement Section

6th June 2023

Case Study 1
 Financial Institution

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 CUSTOMER PROFILE

Age - 70-year-old

Nationality – United Arab Emirates

Resident - Sweden

Occupation – Finance Manager

Annual Income – USD60,000

Tom

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 Tom

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 Tom Ben

1 transaction – USD1,000

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 Tom Kate

1 transaction – USD3,000

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 Tom

Remitted a total of 140 transactions

amounting to approximately
USD225,000 within a year

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 PURPOSE OF
REMITTANCES

To pay for family maintenance costs

School fees

Other miscellaneous expenses

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 Tom
Director

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 Alerts relating to customer were
deactivated

Allowed to
Over a
continue 560 USD900,000
period of 4
remitting transactions remitted
years
funds

Tom

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 KEY TAKEAWAYS

It is not enough to have transaction

monitoring systems in place

Subject persons are to ensure that the

information provided by the customer as
to the purpose of the transactions is
adequate

Transactions are to be considered in a

holistic manner and placed side by side
with the customer profile

Friendly/familiar relationships are not

to be relied on

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Case Study 2
 Financial Institution

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 Customer Profile

Occupation
• Consultant
Account Turnover
Expectations
• €25,000
Sam Risk Rating

• Low Risk
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 Customer Chairman of the Board
and Beneficial Owner

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 Transactions processed through Customer’s
account on 15th May 2018

1. €100,000 inward transfer

2. €80,000 outward transfer

3. €20,000 outward transfer

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 Information obtained by the Company in relation to
these three transactions

€ 100,000
Donation from parents
Parents

€ 80,000
Donation to sister
Sister

€ 20,000
Repayment of Debt to
Brother
Brother
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 Red Flags

The fact that the account was only opened and used
to process the mentioned three transactions.

Two payments were credited to the account with

the same amount being debited from the account
on the same day

There was significant deviation from the account

turnover expectations (€25K per year).

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 Red Flags (cont.)

Customer’s description of employment was too

generic.

No agreements were provided by the customer as

an explanation to the transactions.

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 Key Takeaways

Subject Persons shall ensure that the transactions being affected by their customers are duly substantiated,
and that the rationale of such transactions is known.

The purpose and intended nature of the business relationship is crucial not only to build a comprehensive
business and risk profile but also to be able to conduct efficient and effective transaction scrutiny.

The fact that the customer is related to the subject person’s BO does not exonerate the subject person from
carrying out the necessary CDD checks on the customer, including the effective scrutiny of transactions.

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Case Study 3
 SP’s Profile 24

Financial institution registered in Malta

Owned by a natural person

Manual transaction monitoring system – excel based

Large volumes of transactions without any economic rationale went unnoticed

 Customer Profile 25

Orange Payments* - biggest customer of SP

Processed large volumes of transactions in a short period of time

No online presence, despite the multiple financial services offered

and the volume of clients it serviced

Once the transactions were processed, Orange Payments ceased

operating

Medium-risk customer
 ▪ Loan agreement between Orange Payments as the LENDER and Ms. Venus as the
BORROWER for Euro 5.3 million
▪ In less than 2 years, Euro 7.2 million were transferred from Orange Payments to Ms.
Venus
▪ During this 2 year period, Ms. Venus entered into another loan agreement with Orange
Payments, however, this time she was the LENDER
▪ Ms. Venus lent Euro 4.5 million to Orange Payments, at the same time that she had
borrowed and was paying the loan of Euro 5.3 million

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 Orange Payments
- Loan agreements
Ms. Venus to and from Ms. Venus Trading
Venus and Venus
Trading

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 Adverse media reported

Adverse media also included reference to the scheme that was taking place

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 Key take-aways
• Documentation – why is it collected?
• Transaction monitoring tools should be proportionate to the business
activity of the SP
• Be aware of patterns
• Do not overlook the most obvious checks – language, currencies,
dates, involved entities, generic details, too nice, no online presence
• An adequate risk assessment is the engine of compliance
• Invest in your people

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