Cash Compensation model
Analysis by FIU-the Netherlands has shown that large, well-known companies in labour-intensive sectors such as construction and parcel delivery place work orders with (sub)contractors and pay them in cash. At these subcontractors, however, no or hardly any wage payments via wire transfer take place; employees are paid in cash.
FIU-the Netherlands has indications that the cash used for this purpose often has a criminal origin. This cash purchased from criminals is compensated by subcontractors through wire transfers (invoice) payments. That money is used to buy (luxury) goods, services, real estate or to finance criminal activities. This way, criminals are compensated for the cash they brought in. The payments in this money laundering scheme often seem to be facilitated by underground bankers.
Work that our society partly runs on is paid for with criminal cash through these schemes. This again shows the intertwining of the criminal underworld and the legitimate upper world in Dutch society. Besides money laundering, this phenomenon carries several risks such as labour exploitation, unfair competition and fraud. FIU-the Netherlands sees Cash Compensation as one of the ways by which legal entities are abused and by which the integrity of the financial system is compromised. Watch the video for more information.