The document discusses the prevalence of money laundering and fraud in the luxury goods, art, and collectibles markets, emphasizing the importance of Know Your Customer (KYC) practices and enhanced identity verification to mitigate risks. It outlines the challenges posed by new regulations and fraudulent activities, such as synthetic identity fraud and identity theft, that specifically impact high-value transactions. The text also highlights the need for compliance with anti-money laundering (AML) laws and the role of financial institutions in protecting against these threats.

1. Knowing Your Customer Better To Avoid Fraud & Financial
Loss
Money Laundering in the
Art, Collectibles, &
Luxury Goods Markets
Art , Collectibles, & The Luxury Goods Market
info@idmerit.com || www.idmerit.com || 1-888-378-9283
1

2. TABLE OF CONTENTS
MONEY LAUNDERING & LUXURY GOODS
Introduction
04
IDMERIT Cryptocurrency Regulations in the EU
05
Anti-Money Laundering Laws &
Regulations
07
Know Your Customer (KYC)
Obligations in the United States
Picture-Perfect Crimes: Money
Laundering & Fraud in the Luxury
Art Market
08
Fraud in Luxury Retail
11
Jewelers Continue To
Face Identity Verification Woes
13
14
Fraud Protection & Fines in the
Luxury Yacht Industry
17
About IDMERIT
2

3. IDMERIT
Acronyms & Abbreviations
AMLA2020 - Anti-Money Laundering Act
of 2020
AMLD4 - Fourth Anti-Money Laundering
Directive
AMLD5 - Fifth Anti-Money Laundering
Directive
AML – Anti-Money Laundering
AML/CTF – Anti-Money
Laundering/Counter-Terrorism Financing
Rules
AMLD – Anti-Money Laundering Directive
BSA – Bank Secrecy Act
CDD – Customer Due Diligence
CFATF – Caribbean Financial Action Task
Force
CFT – Combating the Financing of
Terrorism
EDD – Enhanced Due Diligence
EFT – Electronic Funds Transfer
eIDV – Electronic Identification &
Verification
EU – European Union
FATF – Financial Action Task Force
FCA – Financial Conduct Authority (UK)
FinCEN – Financial Crimes Enforcement
Network
IdM — Identity Management
IDaaS — Identity as a Service
FIU – Financial Intelligence Unit
ISIL – Islamic State of Iraq & The Levant
ISIS – Islamic State of Iraq & al-Sham
KYC – Know Your Customer
KYCC – Know Your Customer’s Customer
KYE – Know Your Employee
MiFID – Markets in Financial Instruments
Directive
MSB – Money Service Business
OFAC – Office of Foreign Asset Control
(US)
PEP - Politically Exposed Person
RBA – Risk-Based Approach
SAML — Security Assertion Markup
Language
SAR - Suspicious Activity Report
SSO — Single Sign-on
UBO – Unique Beneficial Owner
3

4. IDMERIT Money Laundering in the Luxury Goods Market
Introduction
The Luxury Goods market in the U.S. is estimated
at $51.2 billion in the year 2021. (Global Industry
Analysts). Identity verification and Know Your
Customer (KYC) procedures need to be
implemented on high-transaction items to protect
banks and sellers from fraud, money
laundering/terrorist financing, and counterfeit
goods.
The luxury goods market also faces its share of
fraud, counterfeit scams, and money laundering
crimes. In fact, two owners of Los Angeles-based
import and export textiles company, Pacific
Eurotex were recently sentenced and ordered to
forfeit $3.1 million in addition to paying a
$370,000 fine due to their part in a complex
money laundering scheme.
Major categories of luxury goods include:
Haute couture clothing
Rare art/paintings or sculptures
A high-end automobile, such as a sports car
A yacht (motor, sailing, catamaran, and
gulet)
Accessories, such as jewelry and high-end
watches
Upscale luggage and personal travel
equipment
Wine (premium, super luxury, icon, and rare
vintages)
Homes and estates ($10M or more in home
valuation)
Illicit activity is growing throughout the luxury
goods market especially in fashion, high-end
jewelry, rare art, and the upscale real estate
market. Fraudulent use of credit cards or identity
spoofing are major issues which cause
chargebacks and, in the case of identity spoofing,
can even lead to complex forms of money
laundering.
Identity Theft: Stolen Credit Cards & Identity
Spoofing
“Of the 2.2 million fraud reports, 34% incurred a
loss, up from 22% in 2019. These losses totaled
$3.3 billion, with a median loss of $311. In total,
the FTC reported 1,387,615 cases of identity
theft.” (CreditCards.com) Identity theft and the
use of stolen credit cards are extremely common
crimes in different industries within the luxury
goods market.
Customer identity verification is the first step in
protecting a brand. Understanding who your
customers are, their past, and how to onboard
them while protecting your most vulnerable
assets, your products, is one of the most
important steps a business owner can take.
Global identity verification solutions build risk
profiles from past financial behavior as a method
to segment bad actors and eliminate risk to a
luxury brand.
4

5. Anti-Money Laundering Laws &
Regulations for Banks in the US
Several key changes occured during the last
two years in response to COVID and high
tended fraud cases both within the United
States and abroad.
US AML Act of 2020
Anti-Money laundering regulations become
more stringent as do the associated fines. On
January 1, 2021, Congress passed the
National Defense Authorization Act for Fiscal
Year 2021 (the NDAA), which includes the
most substantial and sweeping improvements
surrounding AML legislation.
Key Provisions of the AMLA 2020
Not only is the BSA being strengthened and
extended but AML enforcement efforts are
being buttressed by legislation like the AMLA
which attempts to add teeth to existing
regulatory efforts.
Key provisions of the legislation include:
Strengthened AML Enforcement
Through Increased Compensation For
Whistleblowers
MLA 2020 Strengthens & Expands
Existing BSA/AML Violation Penalties
AMLA 2020 Legislation Allocates More
Government Resources Committed to
Address Money Laundering
AMLA Provides Additional Statutory
Authority for DOJ to Seek Documents
from Foreign Banks & Financial
Institutions
This omnibus bill includes amendments to the USA Patriot
Act which address a wide range of gaps in previous
legislation. The US’ AML Act 2020 (AMLA) was designed
to address changes in the technological landscape and
the lack of motivation (monetary or otherwise) for
whistleblowers to share AML information with authorities.
The Customer Due Diligence (CDD) Rule
US FinCEN Offers Guidance On The Final Customer Due
Diligence (CDD) Rule
The Financial Crimes Enforcement Network (FinCEN)
recently released guidance in the form of answers to
frequently asked questions regarding the recently adopted
Final CDD Rule.
In the Frequently Asked Questions guidance, FinCEN
clarified how covered financial institutions (such as
banks) should conduct customer due diligence should
occur beyond the initial customer onboarding process. In
its guidance, FinCEN clarified that, “[c]overed financial
institutions must establish policies, procedures, and
processes for determining whether and when, on the
basis of risk, to update customer information to ensure
that customer information is current and accurate.
The CDD rule requires banks to:
Identify and verify the identity of customers
Identify and verify the identity of the beneficial
owners of companies opening accounts
Understand the nature and purpose of customer
relationships to develop customer risk profiles
Conduct ongoing monitoring to identify and report
suspicious transactions and, on a risk basis, to
maintain and update customer information
IDMERIT 5

6. IDMERIT
Information collected throughout the relationship
is critical in understanding the customer’s
transactions in order to assist the financial
institution in determining when transactions are
potentially suspicious.” The answers to these
questions clarified the roles and responsibilities
banks have to further develop, and integrate,
ongoing customer due diligence and information
programs to lower the risk of anti money
laundering and terrorist financing.
The CDD rule requires banks to:
1. Identify and verify the identity of customers
2. Identify and verify the identity of the
beneficial owners of companies opening
accounts
3. Understand the nature and purpose of
customer relationships to develop customer
risk profiles
4. Conduct ongoing monitoring to identify and
report suspicious transactions and, on a risk
basis, to maintain and update customer
information
Digital ID & AML Verification: Understanding the
Ins & Outs of Remote KYC & Document
Verification
There are currently multiple methods you can
verify the identity of your bank customers during
the onboarding process and which requirements,
and safeguards bank employees follow will depend
on whether your customer is visiting your bank
branch or opening an account remotely.
Money Laundering in the Luxury Goods Market
This is commonly referred to as in-person identity
verification or remote (eKYC) know your customer
verification. There are several issues when it
comes to digital id verification that remote identity
verification must overcome, including identity
spoofing and tampering.
AML Verification Key To Onboarding Success
AML verification is a process by which new bank
customers have their identity document data
compared with independent databases to verify
their identities and classify their risk level to the
bank. Identity documents must be correct and
valid to allow for this process to be successful.
Identity document validation is a challenging task
as bad actors and criminals are becoming more
ingenious and often fly under the radar due to the
simple nature of this crime.
When onboarding is completed remotely (online)
because there are several ingenious ways to
fraudulently mask or change one’s appearance. All
digital id verifications should have the
corresponding biographical data run through
watchlists and AML verification databases to
guarantee bad actors or fraudsters aren’t provided
access to your bank. information
6

7. IIDMERIT
Know Your Customer (KYC) in the US
Due to the rising rate of financial crimes and
fraud, banks and financial institutions are now
being required to conduct in-depth customer due
diligence and AML verification on new customers
during the onboarding process. The challenge for
compliance officers and large banks in terms of
meeting KYC obligations is to balance the need
for fast customer onboarding while also
managing a robust AML verification program.
Global identity verification services are
continuously tasked with helping clients who lag
behind with the development of their compliance
programs.
Many countries around the world have adopted
different sets of laws and regulations for banks
and financial institutions. If they don’t adhere to
these rules, they face severe penalties and fines.
The United States led the way with the Bank
Secrecy Act which set out standards that banks
and financial institutions were required to follow
and put in place anti-money laundering programs
and required risk profiling. On January 1, 2021,
Congress passed the National Defense
Authorization Act for Fiscal Year 2021 (the
NDAA), which includes the most substantial and
sweeping improvements surrounding AML
legislation.
UHow Does Proper KYC Help In Protecting
Financial Institutions?
The biggest approach to commit financial fraud
and extortion is identity theft. People get away
with committing these financial crimes by using a
false or a fake customer background. This is
where a robust Know Your Customer compliance
program severely limits the potential for fraud at
the outset.
During most KYC compliance programs,
customers are asked to submit authentic
documents such as passports, a UID (Unique
Identification Number), or a copy of their most up-
to-date utility bills or insurance plan.
These documents act as identity and address
proof and help the banks and financial institutions
calculate the customer’s financial activities and
any potential scale of risk they may pose. KYC
compliance programs (which include ongoing
monitoring) ensure banks and financial
institutions remain alert about their customers'
risk profiles and is a process that segments
suspicious customers or risky transactions.
Banking is an industry with an innate danger of
monetary fraud, so it is critical to perform a
screening on customers to control and eliminate
the potential of thefts.
Know Your Customer (KYC) Obligations
7

8. Picture Perfect Crimes: Money
Laundering & Fraud in the Luxury
Art Market
According to a recent report by Transparency
International on the art market, this industry is at
higher risk due to the traditions of confidentiality
and discretion in the art world, and that works of
art can be both high-value and easily
transportable.” This level of confidentiality and
portability lend the industry to be ripe for potential
fraud and money laundering.
Customer identity verification during complex
transactions involving rare art including
sculptures, paintings, and collector’s pieces. The
Heritage Foundation, New York MET, and private
art dealers and auctions are some of the many
organizations in this industry at risk for fraud.
Money laundering and proceeds from sales of
illicit goods such as arms or counterfeit
substances are a huge issue that until recently
has gone undetected.
In the United Kingdom, “art market participants”
were included in amended legislation.
Art Dealers will be required to:
Conduct a risk assessment
Appoint a Money Laundering Reporting
Officer (MLRO)
Document your AML policies and
procedures
Due to this amendment, any art dealers or those
engaged in the sale or trade of art valued at over
£8,500 (approx. 10,000 Euros) must adhere to the
requirements above. As the sale is being carried
out, risk profiles need to be established and the
level of risk of the parties needs to be determined
and appropriate due diligence carried out.
According to Sotheby's Art Institute, there are
three main facets to art crime:
Theft by deception — forgery, fakes, white-
collar crime such as money laundering, the
manipulation of ownership histories and the
process of illicit trafficking of cultural
objects. A Mutual Art article mentions an
often-cited statistic that 10 percent of
works in museums are fakes.
Theft by larceny — art theft and illegal
acquisition of objects from
museums/public collections.
Theft by destruction — socio-economic and
political forces have had an impact upon
material culture. Cultural restitution and
spoliation is not merely a past issue, but
lives today in ongoing court cases and the
ravages of war-torn countries."
IDMERIT 8

9. IIDMERIT
According to a recent report by Transparency
International on the art market, this industry is at
higher risk due to the traditions of confidentiality
and discretion in the art world, and that works of
art can be both high-value and easily
transportable.” This level of confidentiality and
portability lend the industry to be ripe for potential
fraud and money laundering.
Customer identity verification during complex
transactions involving rare art including
sculptures, paintings, and collector’s pieces. The
Heritage Foundation, New York MET, and private
art dealers and auctions are some of the many
organizations in this industry at risk for fraud.
Money laundering and proceeds from sales of
illicit goods such as arms or counterfeit
substances are a huge issue that until recently
has gone undetected. In the United Kingdom, “art
market participants” were included in amended
legislation.
Art Dealers will be required to:
Conduct a risk assessment
Appoint a Money Laundering Reporting
Officer (MLRO)
Document your AML policies and
procedures
Due to this amendment, any art dealers or those
engaged in the sale or trade of art valued at over
£8,500 (approx. 10,000 Euros) must adhere to the
requirements above.
As the sale is being carried out, risk profiles need
to be established and the level of risk of the
parties needs to be determined and appropriate
due diligence carried out.
When makes a customer “high risk”?
“High risk country” status - one or both parties
are from a high risk country
Politically Exposed Person (PEP) - a client is
susceptible to potential bribery or being engaged
in public office and has a high level of trust
No face-to-face interaction - both sides of the sale
are done virtually or through intermediaries
In addition to art dealers, sales of luxury yachts
and homes are susceptible to money laundering
and identity fraud.
Art Theft & Fraud Statistics
Art theft and fraud go hand in hand around the
world and with the lax nature of routine identity
verification and the implementation of Know Your
Customer procedures, auctions houses,
museums, and art dealers are at increased risk to
be one of those who are affected by the
estimated $4 to $5 billion in annual losses in this
space.
The "Big Four" Nations
According to Interpol, the highest level of art theft
takes place within the following nations:
1. Iraq
2. Afghanistan
3. Syria
4. Libya
9

10. Synthetic Identity Fraud Plagues
Luxury Retailers
Synthetic Identity Fraud Hurts Luxury Retailers
Sophisticated fraud attempts against luxury retail
brands are becoming more prevalent including the
use of synthetic identities in order to access high-
end luxury brands where possibly the premium
identity verification services carry a lower burden
or are nonexistent in order to resell goods even at
a fraction of their MSRP price. Usually, in order to
access high-end products, a new customer must
furnish an ID card and use valid and variable
information such as a social security number and
credit card account information.
When a bad actor attempts to create a synthetic
ID, several tasks must be accomplished:
A modus operandi (motive or goal) must be
chosen
Real personally identifiable information (PII)
must be sourced from a worthwhile target
Pieces of real and fraudulent information
must be stitched together to create an
identity the criminal can use to commit an
act of identity fraud
The criminal must then knowingly use the
identity to apply for some sort of benefit via
a bank or organization and be able to fool
the identity verification or know your
customer solution
Many criminals use brazen techniques to steal PII
data or identifying data out of dumpsters or even
purchase this data on black market exchanges
(in-person or online). Once the criminal acquires
this information there are normally two routes to
using the information after they are approved for
services: quickly attaining resources and maxing
out a financial instrument or using the
fraudulently attained resources to build a credit
score up over time and simply disappearing after
the entirety of funds are depleted.
Synthetic Identity Fraud Statistics
Synthetic identity fraud is rampant across many
different industries including the
banking/financial sector. According to Thompson
Reuters, "One widely reported analysis by
Auriemma Group, an information and advisory
firm for the payments and lending industries,
suggested that synthetic identity fraud cost U.S.
lenders $6 billion."
So, what can luxury retailers do?
Implement Eligibility Verification
Streamline Policies and Procedures
Upgrade Your Point of Sale System
Use acquiring banks with low chargeback
thresholds
IDMERIT 10

11. Money Laundering in the Luxury Goods Market
Fraud in Luxury Retail
The most common products bought with stolen
credits card numbers by illicit actors include:
Macbooks
Rolex watches
Smartwatches
Diamond rings
World of Warcraft gold
Louis Vuitton handbags
Cases for electronic devices
Gift cards for iTunes and Best Buy
Fraud and chargebacks are extremely common in the
luxury retail space and can derail an entire brand’s
progress as well as its ability to be seen as a going
concern. Identity verification services should offer
robust fraud protection and transaction monitoring in
order to keep bad actors out. Many of these brands
do not have strict policies covering customer identity
verification.
Fraud in Luxury Retail
According to Shopify, “[t]he global ecommerce
market is expected to total $4.89 trillion in 2021.
That figure is estimated to grow over the next few
years, showing that borderless ecommerce is
becoming a profitable option for online retailers.”
Identity verification services including Know Your
Customer procedures are a mainstay to prevent
fraud and stolen or counterfeit goods. Fraud in
luxury retail happens in a few surprising ways.
The common types of retail fraud taking place
are:
Vendor Theft
Refund Fraud
Employee Fraud
Discount Abuse
Sweethearting (false price adjustments)
Cash Register Tampering
Wardrobing (returning after use or “renting”)
“Consumers returned an estimated $428 billion in
merchandise to retailers last year, approximately
10.6 percent of total U.S. retail sales in 2020. Of
those returns, roughly 5.9 percent were fraudulent,
equating to $25.3 billion,” according to a report
released by the National Retail Federation (NRF)
and Appriss Retail. During the return process,
customer identity verification needs to be
completed by scanning and verifying identity
documents against watch lists and/or fraud
databases.
IDMERIT 11

12. Luxury Clothing Manufacturers
This is why customer identity verification is
important during the sale of retail goods - whether
it be bulk purchases or one-off high-end luxury
items.
Cross-channel returns can present problems for a
luxury brand. According to Vogue Business this is
“the ability to buy an item online and take it back
in store — is the feature that affluent shoppers
worldwide look for.”
World{s Most Counterfeited Brands
According to reports by major industry counterfeit
analyses
Number of Searches for Fake Designer Brand
1. Rolex – 228,000
2. Louis Vuitton (PARIS:MC.PA +2.48%) –
118,000
3. Gucci – 87,600
4. Yeezy – 37,200
5. Crocs – 25,200
(Source Yahoo News)
For instance, Article (4), Section 1 states, “.
Financial institutions and DNFBPs are required to
identify, assess, and understand their crime risks
in concert with their business nature and size…”
This Decree also covers the documentation
processes needed when corresponding AML/CFT
risks are identified.
Regulatory Oversight of Anti-Money Laundering
& Counter-Terrorist Financing Efforts
Aside from the various international oversight
groups, the entity responsible for regulatory
oversight in the United Arab Emirates is the
Central Bank of the United Arab Emirates.
The responsibilities of the CBUAE include (but are
not limited to):
examining Licensed Financial Institutions
(LFIs)
ensuring adherence to the UAE’s AML/CFT
Framework
Identifying emerging risks in the UAE’s
financial sector
For more information and a detailed description
of the responsibilities of the CBUAE, visit their
website at: https://www.centralbank.ae.
IDMERIT 12

13. IIDMERIT Money Laundering in the Luxury Goods Industry
“Fraud in this industry goes back hundreds of
years – before the internet, before credit cards,”
Sourabh Kothari, director of Merchant Advocacy at
Signifyd said. “People have been stealing jewelry
for centuries, even millennia because it carries
value and crosses borders.” Global identity
verification solutions often aren’t focused on
helping luxury jewelry brands protect themselves
against fraud or identify repeat offenders.
Examples of high-end jewelry brands that cater to
premium customers include:
Cartier
De Beers
Chopard
Pomellato
Boucheron
David Morris
Tiffany & Co.
One customer-facing identity verification policy
listed on the website of trejours states, “In order to
make sure that we are creating a safe and reliable
marketplace where jewelry lovers and jewelry
vendors can have a great experience, we take
steps to verify the identity of every Trej member via
the most trusted identity verification system used
by major financial and banking institutions. We
trust, but we verify.” It is this attention to detail and
the “extra step” that protects this luxury jewelry
marketplace available for customers to rent and
purchase fine jewelry.
Owner of Johnston jewelry company charged with
wire fraud, identity theft
According to the U.S. Attorney’s office, 51-year-old
Gerald Kent of Groton, Connecticut “orchestrated a
long running, multi-million dollar fraud scheme that
defrauded a debtor finance company of more than
$3.6 million.” According to local news outlets, Kent
allegedly created fake invoices for Groupon and
sent them to a finance company in order to have
that company purchase old debts at a discount. In
order for this not to occur it is important that
invoices be verified and possible spot checking to
occur.
Thorough Know Your Business identity verification
should also have been carried out by the finance
company. Many fraudulent acts and losses can be
avoided if one of these checks is completed and
potential business owners and their pasts are
thoroughly vetted for past financial crimes and
fraudulent actions.
Two Suspects Allegedly Commit Identity Theft to
Purchase $17,000 in Jewelry
The gap between robust Know Your Customer
procedures and identity verification still needs to be
closed. Two suspects allegedly committed identity
theft by opening a credit line using another
individual’s information at Kay’s Jewelers to
purchase over $17,000 in jewelry.
The fraudulently purchased items included a
diamond ring, two gold necklaces, and an additional
watch. Identity theft is as serious of an issue for
jewelers as it is for auction houses and those who
deal in rare collectibles.
Jewelers Continue To Face Identity
Verification Woes
13

14. IIDMERIT
Money Laundering Through Sales of Luxury
Yachts
In general, “yacht models can range in price
anywhere from $500,000 and upwards of
$10,000,000, depending on size, year, and
model.”(GalatiYachts) At this high of a price point,
there are numerous reasons for customer identity
verification and, if the exchange is through an
intermediary or across international waters, a
global identity verification solution should be
integrated into the sale.
According to SuperYachtTimes, “2020 ended on
295 used yacht sales of vessels over 30 metres,
compared with 278 in 2019. The all-important 30-
40 metre market bore the brunt of the decline in
new-build sales during 2020. 76 new yachts in this
category were sold in 2020 compared with 98 in
2019.”
Criminal enterprises and large organizations tend
to find unique and often complex (difficult to
track) methods by which they convert currency
derived from illegal activities into what seemingly
has been earned from legitimate sources. These
methods have been categorized by the FBI and
other investigative entities into specific typologies
and a set of three steps that are shared by nearly
all money launderers including those in the
yachting industry.
Typical Process of Money Laundering
1. Placement
2. Layering
3. Integration
Instead of just discussing the three steps without
any context, it is important to understand how this
potentially occurs in the yachting industry and
other high-end luxury goods translations.
1. Placement - Placing the funds into a
legitimate financial system to prepare for
the yacht sale.
2. Layering - the originating funds are
disguised as the result of legitimate
transactions. This may occur via fraudulent
ledgers or the masking of where the funds
originated from originally (drug sales, illegal
arms or human tracking proceeds, etc.)
3. Integration - sale or transfer of items such
as a yacht or high-value real estate property
can be used to return the funds back to the
criminal. The funds are then said to be
"washed."
How Identity Verification & Know Your Customer
During & Subsequent To Yacht Sales Can Protect
Your Organization From Severe Loss & Financial
Hardship
Strict identity verification and Know Your
Customer procedures implemented during
onboarding can improve the customer experience
and save a luxury yacht broker time and often
millions of dollars of fines.
Fraud Protection in the Luxury Yacht
Industry
14

15. IIDMERIT Money Laundering in the Luxury Goods Industry
1MDB Yacht Seized in Landmark Money
Laundering Case
A $250 million super yacht is at the center of a
money-laundering story that is larger than the
boat itself. “The quarter-of-a-billion-dollar boat is
believed to be the property of Jho Low, a
Malaysian financier with close ties to disgraced
and defeated former Prime Minister Najib
Razak.”(AMLPartners) Jim Low was part of
1MDB, an organization purportedly connected to
officials high up in the malaysian government
including then Prime Minister Najib Razak. Razak
was accused of channelling over RM 2.67 billion
(approximately US$700 million) from 1Malaysia
Development Berhad (1MDB) for personal gain
through his bank accounts.
Three additional money laundering or drug cases
resulting in the seizure or forfeiture of luxury
yachts include:
13 June 2021 - vessel ‘SY Windwhisper’
seized as 3 arrested after a tonne of
cocaine was found onboard
8 July 2020 - ‘Sunrays’,seized by Royal
Gibraltar Police (RGB) following ongoing
operation into money laundering & cross
border Transnational drug trafficking
June 20 2020 - US Department of Justice
links $957m luxury yacht Topaz with 1MDB
scandal
One overarching necessity is to have a robust
global identity verification solution available to
broker, buyer, or seller during these complex
situations.
Customer identity verification is one of the most
important aspects when discussing the sale or
rental of high-end yachts or real estate. Yachts
and high-end real estate sales are, again, prime
targets for money launderers or fraudsters as the
level of anonymity is usually kept quite high and
can be done on a handshake or based on one’s
reputation.
Without careful risk assessment and customer
due diligence throughout the sale, one or more
parties can be easily swindled out of hundreds of
thousands or millions of dollars.
The yacht purchase and sales process can be
quite daunting and involved especially with
industry jargon and the high expectations of
upscale, discerning clientele.
The maritime and yachting world is rife with
jargon (flag state, charter certificates, port state
control, etc.), and the sales process adds to that
with “listing broker” and “selling broker.” (Denison
Yacht Sales) There can be many moving parts,
parties, and problems that occur during the sale
of a super yacht or luxury yacht.
Money Laundering Fines in the Luxury
Yacht Industry
15

16. IDMERIT Money Laundering in the Luxury Goods Industry
References
Anti-money laundering and combatting the financing of terrorism (AML/CFT). CB UAE. (n.d.).
Retrieved November 16, 2021, from https://www.centralbank.ae/en/cbuae-amlcft.
Combatting money laundering - the official portal of the UAE Government. (n.d.). Retrieved
November 16, 2021, from https://u.ae/en/information-and-services/business/combatting-
money-laundering.
Intelligence, H. E. R. (2020, November 26). Synthetic ID fraud is growing. can detection keep
up?: Legal blog. Thomson Reuters Law Blog. Retrieved November 16, 2021, from
https://legal.thomsonreuters.com/blog/synthetic-identity-fraud-worrying-u-s-regulators/.
Money laundering: The stages of layering. ComplyAdvantage. (2021, November 9). Retrieved
November 16, 2021, from https://complyadvantage.com/knowledgebase/money-laundering-
layering/.
Sotheby's Institute of Art. (n.d.). Theft, fakes and forgery...understanding art crime in a global
art market. Sotheby's Institute of Art. Retrieved November 16, 2021, from
https://www.sothebysinstitute.com/news-and-events/news/understanding-art-crime-in-a-
global-art-market.
UAE's new Executive Office of AML/CFT and Dubai's new specialized money laundering court.
The Anticorruption Blog. (2021, October 11). Retrieved November 5, 2021, from
https://www.anticorruptionblog.com/anti-money-laundering/uaes-new-executive-office-of-aml-
cft-and-dubais-new-specialized-money-laundering-court/.
What do the Interpol stats reveal about art theft? Widewalls. (n.d.). Retrieved November 16,
2021, from https://www.widewalls.ch/magazine/interpol-art-theft.
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17. IDMERIT Money Laundering in the Luxury Goods Market
Headquartered in San Diego, California, IDMERIT provides an ecosystem of identity verification solutions designed
to help its customers prevent fraud, meet regulatory compliance and deliver frictionless user experiences. The
company is committed to the ongoing development and delivery of offerings that are more cost-effective and
comprehensive than other solution providers.
IDMERIT was funded by experts who have been sourcing data on personal and business identities across the globe
for over a decade. This access to official and trusted data throughout the world has become increasingly important
as companies find themselves completing transactions across borders as a standard course of business.
www.idmerit.com
About IDMERIT
IDMERIT
5838 Edison Pl STE 210
Carlsbad, CA 92008
info@idmerit.com
Phone: +1-888-378-9283
Memberships & Compliance
Contact Information
Our Identity Solutions
Identity Verification
Identity Validation
Anti-Money Laundering
Risk Mitigation
PEP & Adverse Media
Watchlist Screening
Privacy & Security
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