Nested accounts refer to a situation where an account holder sets up multiple layers of sub-accounts or intermediary accounts within a primary account. This structure often involves several tiers of accounts held in the name of different entities or individuals, all linked to a central account. 

As far as financial crime compliance is concerned, nested accounts can be used to obscure the true source or destination of funds, making it challenging to trace transactions and identify suspicious activities. Criminals may use nested accounts to launder money, evade detection, or conduct complex fraudulent schemes. To combat this, financial institutions implement stringent Anti-Money Laundering (AML) measures, such as enhanced transaction monitoring and due diligence, to detect and investigate unusual patterns or structures. Effective oversight of nested accounts helps ensure compliance with regulations and prevents the misuse of financial systems for illicit purposes.