Money laundering as a service has emerged as a full-service criminal industry, offering turnkey solutions to conceal illicit proceeds for a range of clients. On 14 January 2025, law enforcement in Austria, Belgium and Spain dismantled one of the most extensive MLaaS networks to date, arresting 17 suspects and seizing assets valued at over €4.5 million. This operation exposed how parallel banking and hawala schemes now function as professional labs for laundering funds for migrant smugglers, drug traffickers and other illicit actors.

Money laundering as a service in the crosshairs

Organised crime groups no longer need to build their own laundering chains from scratch. Instead, they turn to specialist networks that provide end-to-end money laundering as a service. These outfits advertise on encrypted messaging apps and social media, promising rapid conversion of cash or crypto into clean funds. European authorities discovered that one such network moved more than €21 million in illicit proceeds over eighteen months. Investigators noted that the network’s clients ranged from Arabic-speaking migrant smugglers to Chinese-run drug rings, all seeking efficient ways to obscure origins and integrate illicit gains into the legitimate financial system.

While traditional money laundering often relied on shell companies and complex trade-based schemes, MLaaS operators now blend high-tech cryptocurrency exchanges with old-school cash couriers. They exploit gaps in cross-border regulation, especially where oversight of informal value transfer systems remains weak. By combining electronic transfers, cash deposits into multiple bank accounts and on-the-ground collection services, they can layer transactions quickly and outpace regulators.

This business-model approach transforms money laundering into a service industry with clear profit margins and customer support. Clients pay a fee, often a percentage of the sum laundered, in exchange for guaranteed delivery of laundered funds to designated accounts or cash pickup points. The result is a turnkey, on-demand laundering service that can outmaneuver traditional compliance controls.

Parallel banking amplifies illicit flows

Parallel banking lies at the heart of many MLaaS operations. In essence, operators run unofficial banking networks in parallel to the regulated system, processing deposits and withdrawals without involving licensed financial institutions. In this case, two parallel branches catered separately to Arabic-speaking and Chinese-language criminal communities.

Members of the Arabic-speaking branch used encrypted chat channels to coordinate cash pickups across major European cities. They collected euros from migrant smuggling profits, then moved the funds through front companies and informal cash couriers. The Chinese-oriented branch specialized in facilitating investments in real estate back in China, converting euros into yuan via shadow exchange desks that never touched regulated banks.

By keeping these parallel channels off the books, MLaaS providers evade anti-money laundering controls such as Know Your Customer checks and transaction monitoring. They fragment transactions into smaller amounts, moving cash in multiple legs and leveraging networks of trusted couriers. Europol data shows that such parallel banking networks can process hundreds of deposits and withdrawals each day, handling millions in volume before any single regulated entity notices suspicious patterns.

Hawala schemes and migrant smuggling convergence

Hawala, an ancient informal value transfer system, has been co-opted by modern MLaaS operators. Originating in South Asia and the Middle East, hawala relies on trust-based IOUs rather than physical currency movement. The Paris branch of this network, for instance, accepted cash from migrant smuggling profits and issued equivalent electronic credits to correspondents in North Africa and the Middle East.

Criminal networks involved in migrant smuggling found hawala particularly attractive because it bypasses official checkpoints and banking infrastructure. Smugglers paid hawala brokers in Europe, and their associates elsewhere received funds almost instantly. Europol investigators uncovered encrypted instructions directing couriers to deliver cash drops at predetermined locations, while digital hawala IOUs settled accounts between operators.

This convergence of hawala schemes with organized smuggling cells speeds up money movement but also creates complex webs that are difficult to trace. Authorities estimate that more than €10 million moved through hawala channels linked to this operation alone. By leveraging pre-existing trust networks and encrypted communications, MLaaS providers can maintain operational security even when law enforcement deciphers one node in the chain.

Seizures reveal scale and sophistication

The 14 January action day across Austria, Belgium and Spain yielded a trove of evidence demonstrating the industry-scale operations of modern MLaaS networks. Law enforcement arrested 17 suspects—15 in Spain, and one each in Austria and Belgium. The individuals, predominantly Chinese and Syrian nationals, stood accused of offering a full suite of money laundering services.

Seized assets included:

• €206 000 in cash carried by couriers
• €421 000 held across 77 bank accounts opened under false identities
• €183 000 in cryptocurrency wallets linked to the network
• Ten real estate properties valued at over €2.5 million
• 18 vehicles worth a combined €207 000
• Four shotguns with ammunition, indicating armed readiness
• Numerous mobile phones, laptops and encrypted storage devices
• High-end luxury goods, including watches and jewellery

Investigators estimated that this network had laundered more than €21 million in total. The diversity of seized assets—from real estate to crypto—highlights how MLaaS outfits adapt to client preferences and emerging technologies. By integrating digital and analogue methods, they maintain flexibility and resilience against law enforcement efforts.

Lessons and next steps

This operation underscores the evolving threat posed by money laundering as a service. Traditional compliance frameworks must adapt to confront professionalized criminal enterprises that straddle formal and informal financial channels. Regulators and financial institutions alike need to:

• Strengthen cross-border information sharing to track funds split across jurisdictions
• Enhance scrutiny of high-risk account openings, especially where beneficiaries speak different languages or use shell entities
• Monitor digital marketplaces and encrypted platforms where MLaaS providers advertise their services
• Coordinate with Europol, national FIUs and private sector partners to trace complex hawala and parallel banking networks

Lawmakers are now debating revisions to the EU’s Anti-Money Laundering Directive to address MLaaS directly. Proposals include requiring enhanced due diligence for transactions linked to informal value transfer systems and mandatory reporting by virtual asset service providers. These measures aim to close regulatory gaps exploited by MLaaS operators and restore trust in the financial system.

Conclusion

The €4.5 million bust of a money laundering as a service network marks a significant victory for European law enforcement. Yet it also serves as a stark reminder that organised criminals have professionalized laundering into a specialized industry. As parallel banking and hawala schemes converge with high-tech methods, authorities and financial institutions must evolve in tandem. Only through targeted regulations, cross-border cooperation and vigilant monitoring can the financial system stay one step ahead of MLaaS outfits intent on turning illicit gains into clean profits.

Related Links

• EU Anti-Money Laundering Directive (EU 2015/849)
• FATF Commission guidance on informal value transfer systems
• FATF Recommendations on virtual assets
• Spanish Ministry of the Interior Prevention Plan

Other FinCrime Central News About MLaaS

• Unmasking the “Money Laundering as a Service” Syndicate
• Iranian National Charged with Running Dark Web Marketplace for Fentanyl and Money Laundering

Source: Europol

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