Funnel accounts- what are they and how do they work?

It seems that criminals and money launderers will never run out of innovative ways to hide their cash flow. Human traffickers, smugglers, and scammers have resorted to using 'Funnel accounts' to discretely transfer funds from one place to another.

What is a Funnel account?

Funnel accounts refer to the �funneling� of funds, using different branches of the same bank. A person opens an account in a branch of the bank in one location, after which he deposits money in it. He then relays the account details to accomplices in other parts of the country. The co-conspirator withdraws the money deposited right away, or after a short amount of time.

Funds are gathered from various locations and withdrawn at once at a single place, converging them into a single flow. This is similar to how a funnel works, hence the name. A funnel account is simply used as a means of transferring wealth from one part of the country to another.

These funnel accounts may not raise any red flags immediately, as there is nothing illegal in depositing and withdrawing funds from an account. However, there are a few signs of continuous activity that can help to flag a possible funnel account as suspicious.

A funnel account's main function is to simply provide a gateway to transfer illegal funds from one place to another �legally�. Money launderers treat it as so and may put in multiple deposits of large amounts in a short amount of time. The account does not