Reported by AIMEE GABAY

A new report by the FACT Coalition found that many investigations into environmental crimes do not follow the money. Of the 230 cases analyzed, 76% involved the use of front and shell companies, likely due to flaws in the anti-money laundering systems of foreign countries, researchers said. 

The environmental crimes analyzed occurred between 2014 and 2024 in Amazon countries, mainly in Colombia, Ecuador and Peru. The aim was to better understand how criminals operate and how the associated profits are laundered. 

When it comes to the laundering of profits from environmental crimes, such as illegal logging, illegal mining and wildlife trafficking, the report found that the most common methods identified in the analysis involved front and shell companies, which are used to mask illegal activity.

According to the report’s findings, 25% of all cases, and 44% of “follow the money” cases, involved at least one foreign jurisdiction. The U.S. was the foreign jurisdiction mentioned most across all cases analyzed, either as a transit or destination point for illegally sourced natural resources, such as gold or timber, or dirty money.  

Robert Muggah, co-founder of the Brazilian-based think tank Igarapé Institute, told Mongabay this is because of “the abundance of shell companies, front companies and trade-based fraud that allow criminal actors to wash dirty money” in the country. 

Another reason why the U.S. is central to this network is because real estate is exempt from many rules related to countering money laundering, Muggah explained.

Read full report: https://news.mongabay.com/2024/11/report-reveals-how-environmental-crime-profits-in-the-amazon-are-laundered/