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Case Study: Trade Based Money Laundering Through Over and Under Invoicing

An advanced case study on the most common form of trade based money laundering: mispricing the invoice. You follow a composite Mumbai trading house, built from patterns in public DRI, ED, CBI and court records, through a full laundering cycle. First it over-invoices electronics imports from a related Hong Kong supplier so the bank remits far more than the goods are worth. Then it under-invoices textile exports to a Dubai buyer and collects the balance off the books through hawala. Finally it brings money back as inflated export value, claiming duty drawback, RoDTEP and GST refunds on value that never existed. At each leg you see the documents the bank and customs saw (invoice, bill of entry, shipping bill, IDPMS and EDPMS entries) and why each one looked clean in isolation. The case then unravels through a DRI unit price alert, ED proceedings under FEMA and PMLA, and a review of the real Indian enforcement record on trade mispricing. The course closes with the red flags each gatekeeper missed, how to build a unit price and mirror trade test, and a one-page reconstruction of the scheme. The trading house, its counterparties and all figures in the core case are illustrative and labelled as such; real cases are described only as far as public records go.

Trade Based Money LaunderingOver InvoicingUnder InvoicingRound-TrippingIDPMS and EDPMSCustoms ValuationFEMA and PMLA EnforcementForensic Red Flags

MODULES

6

DURATION

4 Hours

TRACK

Forensic Accounting & Compliance

What You'll Master

Explain how mispricing an invoice moves value across a border while every payment looks like normal trade

Trace an over-invoiced import from the proforma invoice to the bank remittance and the offshore split

Show how under-invoiced exports leave value abroad and how the gap is settled through hawala

Recognise round-tripping through inflated exports and the export incentives claimed on fake value

Reconcile the money moved across all three legs of a mispricing scheme

Understand how DRI, ED and the courts build a mispricing case under the Customs Act, FEMA and PMLA

Design unit price, mirror trade and counterparty tests that catch mispricing in bank, audit and compliance reviews

Access Level

LEARNER

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Everything included

Full Text Playbooks

Actionable Exercises

Mobile Reading Mode

Lifetime Updates

Curriculum Breakdown

Chapter 1: Opening the Case File

3 Lessons

How to Read This Case: A Composite Built From Public Enforcement Records9 min read

Why Mispricing Works: The Value Gap Nobody Checks11 min read

The Cast: The Trading House, Its Offshore Counterparties and the Bank10 min read

Chapter 2: Moving Money Out Through Over-Invoiced Imports

3 Lessons

The Import Leg: Electronics Priced at Twice the Market12 min read

Paying the Inflated Invoice: Remittances, the Bill of Entry and IDPMS12 min read

Where the Excess Went: The Offshore Intermediary and the Split11 min read

Chapter 3: Keeping Money Abroad Through Under-Invoiced Exports

3 Lessons

The Export Leg: Textiles Shipped at Half Their Value11 min read

Settling the Difference Off the Books: Hawala and the Second Payment12 min read

EDPMS and Realisation: Why the Bank Saw Nothing Wrong11 min read

Chapter 4: Bringing Money Home Through Over-Invoiced Exports

3 Lessons

The Return Leg: Inflated Exports Funded by the Launderer's Own Money12 min read

Double Dipping: Drawback, RoDTEP and GST Refunds on Fake Value12 min read

The Full Circle: Reconciling Every Rupee Across the Three Legs13 min read

Chapter 5: How the Case Unravelled

3 Lessons

The First Thread: A DRI Valuation Alert on Unit Prices11 min read

Following the Money: ED Proceedings Under FEMA and PMLA12 min read

The Real Record: Indian Mispricing Cases From Coal Imports to Import Advances13 min read

Chapter 6: Lessons for Forensic and Compliance Work

3 Lessons

The Red Flags the Bank, the Auditor and Customs Could Have Caught11 min read

Building a Unit Price Test and a Mirror Trade Check13 min read

Case Wrap-Up: The Whole Scheme on One Page10 min read