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“Financial Investigations”: 5 patterns of financial fraud and money laundering in Bahrain in 2024

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Hassan Al -Sitry

The annual report of the National Center for Financial Investigations in Bahrain for the year 2024 revealed the presence of 5 patterns used by criminals for financial fraud and money laundering in Bahrain, represented in the use of commercial records for the purpose of money -based money laundering, selling fake insurance policies and fraud in persons, and fraud in loans in a way that targets financial institutions, and the exploitation of drivers to deliver requests to money launder For investment.

Regarding the use of commercial records for the purpose of trade -based money laundering, the report indicated that an organized criminal network has formed an unofficial channel to transfer money abroad in an irregular manner “Hawal Dar”. This network relies on the exploitation of commercial records to deposit the funds collected from individuals in the company’s bank accounts, then make purchases for goods and equipment from a foreign country using these funds, and directing these equipment and goods to a third country with the aim of selling them and handing their value to individuals wishing to transfer money to that country. Thus, commercial transactions to transfer money are used in a way that hides their reality and the final beneficiary of it, and avoiding the official financial system to evade legal accountability.

Regarding the sale of fake insurance policies and fraud on people, the report indicated that many suspicious financial reports on fake insurance policies were monitored to customers as effective insurance policies, with the aim of gaining by forgery. The primary purpose of issuing these bonds was to meet the requirements of the Kingdom’s departure and travel to foreign countries, which may expose customers to legal problems when trying to use this insurance for treatment abroad without their knowledge that they are fake.

As for fraud in loans targeting financial institutions, the report stated that this pattern is that members of Asian nationalities submit fraudulent documents to obtain loans from financial institutions. Once the financial institution agrees to the loan and its disbursement, these individuals escape the country, leaving loans without payment, which constitutes a clear fraud attempt on financial institutions and obtaining unauthorized loans. This style represents one of the created technologies that has a negative impact on the financial system.

Regarding the exploitation of the drivers of delivery of money laundering, the report indicated that a pattern has been monitored through suspicious financial reports, which is that some drivers exploit their personal bank accounts to receive financial sums resulting from the drug trade.

These drivers, who are supposed to use their bank accounts to receive the value of legitimate requests, are taking advantage of these accounts to mix crime funds with legitimate amounts. These illicit financial transfers are often done through digital payment applications, which represents a serious development in money laundering methods, as criminals take advantage of common digital services and ease of transfers through them to hide their illegal source of money.

Regarding the presentation of fake opportunities for investment, the report indicated that a wide spread of advanced fraud has been monitored targeting individuals through social media platforms. The fraudsters exploit these platforms to display fake investment opportunities that seem attractive to achieving quick and easy profits, with the illusion of the victims of the possibility of achieving huge fortunes by buying encrypted currencies and then selling them at a specific time to achieve “guaranteed” profits. The fraudsters often offer convincing marketing methods, pictures and fake videos to give their offers.

These fraudulent operations include two basic and integrated elements: electronic fraud and transfer of money through cryptocurrencies. The risk of this type of fraud increases; Due to the widespread spread of social media and easy access to it, in addition to the increasing gravity of the encrypted currency market.

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