Trade-based money laundering: organized crime, learning and international trade

2020 ◽  
Vol 23 (3) ◽  
pp. 651-661
Author(s):  
Todd Hataley
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Organized Crime ◽  
White Collar Crime ◽  
Rational Approach ◽  
Complex Method ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Criminal Organizations ◽  
Organized Crime Groups

Purpose The purpose of this paper is to examine the link between trade-based money laundering and organized crime. Trade-based money laundering (TBML) has emerged as the newest and possibly most complex method used by organized crime and white-collar crime groups for illegally laundering money in the international financial system. Using legitimate global trade streams, criminal organizations are able to transfer billions of dollars annually between jurisdictions without having to adhere to state-level currency regulations. Design/methodology/approach Using a rational approach to understanding the behavior of criminal organizations, it is argued that TBML will continue to grow as a preferred methodology for laundering money internationally. As criminal organizations continue to be displaced from the more traditional methods of money laundering, they will look for and find TBML as a viable alternative for moving money between different jurisdictions. Findings As the methodology becomes more developed, the skill set will transfer to an increasing number of organized crime groups and be incorporated as a mainstream method for laundering and moving money. Practical implications To stay current with contemporary money laundering schemes, law enforcement agencies will have to train their investigators to spot, investigate and collect requisite evidence for successful prosecution and disruption of TBML offences. Moreover, in the absence of a global regime for sharing trade and customs information, legislators and law enforcement agencies will have to consider how to best expedite the sharing of trade and customs information. Originality/value This is the only study to address TBML as an emerging money laundering technique and the transfer of the skill between organized crime groups. It further details the skills that police investigators needs to develop to successfully combat TBML.

Money laundering through raw diamonds

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Three Stages ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose This paper aims to illustrate how illegally obtained funds are laundered through raw diamonds in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach To identify specific money laundering techniques involving raw diamonds, this study used a qualitative content analysis of data collected from 60 semi-standardized interviews with both criminals and prevention experts and a quantitative survey of 200 compliance officers. Findings Raw diamonds are extraordinarily suitable for money laundering in European German-speaking countries. In particular, they may be used in all three stages of the laundering process, namely, placement, layering and integration. Research limitations/implications Because the qualitative findings are based on semi-standardized interviews, their insights are limited to the perspectives of the 60 interviewees. Practical implications Identifying gaps in existing anti-money laundering mechanisms should provide compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value While prior studies focus on the methods used by organizations to combat money laundering and how to improve anti-money laundering measures, this paper investigates how money launderers operate to avoid detection, thereby illustrating authentic experiences. Its findings provide valuable insights into the minds of money launderers and combines criminal perspective with that of prevention experts.

scholarly journals A New State of Organized Crime

2020 ◽  
Vol 3 (1) ◽  
pp. 13
Author(s):  
Davina Shanti
Keyword(s):  
United States ◽  
Law Enforcement ◽  
Organized Crime ◽  
The United States ◽  
Law Enforcement Agencies ◽  
Outlaw Motorcycle Gangs ◽  
Depth Analysis ◽  
Organized Crime Groups ◽  
Criminal Groups ◽  
New Research

Organized crime is often associated with traditional criminal groups, such as the mafia or outlaw motorcycle gangs; however, new research suggests that cybercrime is emerging as a new branch of organized crime. This paper is focused on the changing nature of organized crime and the factors that influence this shift, particularly in the online space. It will address the question: Can the law identify cybercrime as organized crime? The results of this paper are informed by an in-depth analysis of peer-reviewed articles from Canada, the United States (US), and Europe. This paper concludes that cybercrime groups are structured and operate similarly to traditional organized crime groups and should, therefore, be classified as a part of traditional organized crime; however, cybercrime groups are capable of conducting illicit activities that surpass those typically associated with traditional organized crime. This shift suggests that these groups may represent a larger threat creating a new challenge for law enforcement agencies.

Financial information in the context of anti-money laundering

2020 ◽  
Vol 23 (2) ◽  
pp. 369-378
Author(s):  
George Pavlidis
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Financial Information ◽  
The European Union ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Open Source Data ◽  
Financing Of Terrorism ◽  
Set Up ◽  
Financial Intelligence

Purpose This paper aims to examine three important interrelated issues that arise in the context of financial investigations: the access of law enforcement agencies to centralised bank account registries that have been set up in several jurisdictions; the exchange of financial information between financial intelligence units (FIUs) that function in different jurisdictions; and the exchange of financial information between FIUs and law enforcement bodies. Through the adoption of Directive 2019/1153, the European Union (EU) has attempted to achieve a paradigm shift in these three areas, but many challenges remain, from the interconnection of registries to the implementation of adequate data protection safeguards. Design/methodology/approach This paper draws on primary sources of law, legal scholarship, reports and open source data to analyse the changes that Directive 2019/1153 has brought about in conducting financial investigations in the area of anti-money laundering (AML) and the counter-financing of terrorism (CFT). Findings The new Directive 2019/1153 constitutes an international model for broadening the access of law enforcement agencies to financial information and facilitating information exchanges between FIUs and law enforcement agencies. Nevertheless, many challenges have still to be addressed, such as the interconnection of centralised registries and the implementation of adequate safeguards. Originality/value This is a comprehensive study examining the new EU framework for access to financial information and information exchanges between FIUs and law enforcement agencies, which can be used as a model for international cooperation in the areas of AML/CFT.

Money laundering – the gold method

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Law Enforcement Agencies ◽  
Effective Prevention ◽  
Content Type ◽  
Profound Knowledge ◽  
Compliance Officers ◽  
German Speaking ◽  
Practical Implications ◽  
Broad Overview

Purpose The purpose of this paper is to demonstrate how illicit funds are laundered by using the gold method in German-speaking European countries. Design/methodology/approach To identify approaches to money laundering via gold, 60 semi-standardized interviews with money launderers and compliance officers were conducted. Further, a quantitative survey of 200 compliance officers was administered. Findings The gold trade in European German-speaking countries remains extraordinarily suitable for money laundering. In particular, it may be used for placement and layering. Research limitations/implications The implications are based on the statements of 60 interviewees, including both money launderers and compliance officers. Thus, the derived results are limited to the perspectives of these 60 persons. Practical implications Based on this study’s findings, gaps in the existing anti-money laundering measures are identified. Documenting these inconsistencies should provide compliance officers, law enforcement agencies and legislators with valuable insights into the minds of money launderers. Originality/value As this study explores the perspectives of both compliance officers and money launderers, it provides a broad overview of the issues. Most existing literature fails to observe money laundering from the launderers’ perspective, focusing instead on methods to prevent money laundering. Effective prevention requires profound knowledge of how criminals operate. Only by adopting criminals’ perspective can compliance officers effectively spot money-laundering methods.

Implementation evaluation: a future direction in money laundering investigation

2019 ◽  
Vol 22 (2) ◽  
pp. 318-326 ◽  
Author(s):  
Salwa Zolkaflil ◽  
Normah Omar ◽  
Sharifah Nazatul Faiza Syed Mustapha Nazri
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Sufficient Information ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Implementation Evaluation ◽  
Future Improvement ◽  
Terrorism Financing ◽  
The Law ◽  
Future Direction

Purpose Malaysia has implemented a comprehensive AML/CFT framework, yet its effectiveness remains questionable due to low number of prosecutions on money laundering cases. Therefore, this study aims to understand the reasons for low number of prosecutions, by addressing the challenges faced by the law enforcement agencies in conducting money laundering investigation. This study then identifies future improvement actions to enhance their effectiveness in combating money laundering in future. Design/methodology/approach This study distributed surveys to the law enforcement agencies that are responsible for conducting money laundering investigation in Malaysia. In total, 65 surveys were distributed; however, only 61 were returned to the researchers. Out of the 61 surveys returned, only 39 can be analysed due to incomplete answers given by respective respondents. Findings The results show that the investigating officers are facing difficulties in gathering sufficient information to support their charges. Besides information gathering, they are also facing difficulties due to short investigation timeframe regulated in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLATFPUAA) 2001. This study concludes that, although the law enforcement agencies have the power to investigate money laundering and terrorism financing under the act, Malaysia is lacking in having a good investigative support system to assist the law enforcement agencies during the investigation process. Practical implications The results of this study are helpful to the regulators and law enforcement agencies in determining the flaws of the current money laundering investigation practices. This study also provides suggestions for future improvement action. Originality/value Lack of study focuses on money laundering investigation conducted by the law enforcement agencies, especially in the Malaysian setting, makes the study valuable to the money laundering research.

scholarly journals The Power Shift from Government to Organized Crime in Kyrgyzstan

2021 ◽  
pp. 139-155
Author(s):  
Erlan Bakiev
Keyword(s):  
Social Media ◽  
Law Enforcement ◽  
Organized Crime ◽  
Point Of View ◽  
The Internet ◽  
Small Business Owners ◽  
Power Shift ◽  
Criminal Organizations ◽  
Organized Crime Groups ◽  
Internet And Social Media

AbstractOrganized crime (OC) groups in Kyrgyzstan have reached a level where they are competing with governmental authorities and institutions. Leaders of OC groups can assign members of their groups into law enforcement positions and parliament. It is safe to claim that the absence of rule of law and legal gaps encourage organized crime groups to flourish. From an economic point of view, privatization and capitalization of the economic system in the process of democratization have been in the interest and favor of the development of criminal organizations. Organized crime gangs can easily fill their chests by benefiting from the legal gaps. For instance, all the jewelry store owners at the major markets in Bishkek, Kyrgyzstan pay fees to an OC gang for their safety and security. Small business owners have been taken under control by organized crime to resolve economic disputes or just because they are in their area of control. Moreover, gangs and groups operating in the South Kyrgyzstan, as well as in Talas and Bishkek, deal with drug trafficking. The cultural aspect of this issue focuses on the importance of the clan ties and network connections in Kyrgyzstan and its use by organized crime. The networking used by the OC also includes utilization of the Internet and social media, consequently it became difficult to counter them during the process of globalization and the whole of society being integrated with the internet and social media, the fight against organized crime has become more difficult. Challenging existing socio-cultural structures, to increase law enforcement and combat clan-based subculture and informal law practices, such as the “thieves” “laws” and “brotherhood hierarchies” of organized crime, have been an almost impossible endeavor over the past 30 years. Consequently, breaking the network of OC and destroying its nationwide functions is a challenge, not only in Kyrgyzstan but in many post-soviet countries.

Money laundering through consulting companies

2020 ◽  
Vol 28 (3) ◽  
pp. 485-500 ◽  
Author(s):  
Fabian Maximilian Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Practical Implications ◽  
Combat Money Laundering ◽  
Consulting Companies

Purpose The purpose of this paper is to illustrate how illegally obtained funds are laundered by employment of consulting companies in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach A qualitative content analysis of 28 semi-standardized expert interviews with both criminals and prevention experts, and a quantitative survey of 200 compliance officers led to the identification of concrete money-laundering techniques involving the employment of consulting companies. Findings Consulting companies continue to be used for money laundering in European German-speaking countries, especially in the layering and integration stages of the money laundering process, during which the origins of funds are concealed, and the money is integrated into the legal economy. Research limitations/implications Qualitative findings from the analysis of semi-standardized interviews are limited to the 28 interviewees’ perspectives. Practical implications Identification of gaps in existing anti-money-laundering mechanisms provides compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value The existing literature focuses on organizations that combat money laundering and the improvement of anti-money-laundering measures. This paper outlines how money launderers avoid detection. Both preventative and criminal perspectives are considered.

A Security Paradox. The Influence Of Governance-Type Organized Crime Over the Surrounding Criminal Environment

2020 ◽  
Vol 60 (4) ◽  
pp. 970-993
Author(s):  
Alberto Aziani ◽  
Serena Favarin ◽  
Gian Maria Campedelli
Keyword(s):  
Law Enforcement ◽  
Organized Crime ◽  
Econometric Analysis ◽  
Law Enforcement Agencies ◽  
Security Governance ◽  
Integral Component ◽  
Organized Crime Groups

Abstract This study empirically demonstrates how governance-type organized crime groups (OCGs) operate as an enforcer against volume crimes in the communities they control and argues that their ability to mitigate volume crimes forms an integral component of controlling their territory in the long term. This is because the costs incurred from deterring other crimes are offset by the tangible and intangible revenues that it facilitates. Indeed, combating volume crimes fosters an environment in which OCGs can conduct their activities unfettered by other criminals and law enforcement agencies, safeguard those businesses that pay them protection and curry favour amongst the population. Consequently, the present study verifies the validity of the security governance paradigm by conducting an econometric analysis of 11 different volume crimes.

scholarly journals A Policy-oriented Agent-based Model of Recruitment into Organized Crime

2020 ◽  
Author(s):  
Gian Maria Campedelli ◽  
Francesco Calderoni ◽  
Mario Paolucci ◽  
Tommaso Comunale ◽  
Daniele Vilone ◽  
...  
Keyword(s):  
Law Enforcement ◽  
Organized Crime ◽  
Social Economic ◽  
Agent Based Model ◽  
Agent Based ◽  
Power And Control ◽  
Criminal Organizations ◽  
Different Dimensions ◽  
Organized Crime Groups ◽  
And Control

Criminal organizations exploit their presence on territories and local communities to recruit new workforce in order to carry out their criminal activities and business. The ability to attract individuals is crucial for maintaining power and control over the territories in which these groups are settled. This study proposes the formalization, development and analysis of an agent-based model (ABM) that simulates a neighborhood of Palermo (Sicily) with the aim to understand the pathways that lead individuals to recruitment into organized crime groups (OCGs). Using empirical data on social, economic and criminal conditions of the area under analysis, we use a multi-layer network approach to simulate this scenario. As the final goal, we test different policies to counter recruitment into OCGs. These scenarios are based on two different dimensions of prevention and intervention: (i) primary and secondary socialization and (ii) law enforcement targeting strategies.

Money laundering through banks in Dubai

2020 ◽  
Vol 28 (3) ◽  
pp. 337-352
Author(s):  
Fabian Maximilian Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Banking System ◽  
Structured Interviews ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose The purpose of this paper is to illustrate how illegally obtained funds from Austria, Germany, Liechtenstein and Switzerland are laundered through the banking system in Dubai. Design/methodology/approach The study is conducted using a qualitative content analysis of 60 semi-structured expert interviews with both criminals and money laundering prevention experts, and a quantitative survey of 200 financial sector compliance officers. Findings Some banks in Dubai are highly suitable for all stages of the money laundering process. However, although certain banks have weak compliance mechanisms, others act in an exemplary manner. Research limitations/implications The qualitative findings are based on semi-structured interviews and are limited to the 60 interviewees’ perspectives. Practical implications Identification of gaps in anti-money laundering mechanisms provides compliance officers, law enforcement agencies and legislators with valuable insights into how money laundering criminals operate. Originality/value The existing literature focuses mainly on organizations and the methods they use to combat money laundering. This paper outlines how money launderers operate to avoid detection. Authentic experiences are illustrated. The reader is provided with valuable insights into the minds of money launderers. Both lawful and criminal perspectives are taken into account.

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