Detecting money laundering and terrorist financing via data mining

Zdanowicz, John S.

doi:10.1145/986213.986239

Cited by 47 publications

(26 citation statements)

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“…The imagery of money laundering may involve cross-border transfers, but we know little of how often this happens in practice: logically cross-border transfers should depend on the perceived risks and advantages of keeping funds within one's own jurisdiction (and preferences for investing elsewhere, especially for those with extended family abroad). But conceptually, concealment/ laundering can be achieved by transferring value by whatever means, including mispricing and mis-description of exported goods (Zdanowicz, 2004) or matching those businesspeople/tourists who want dollars or euros with those who have those currencies as proceeds of crime (Passas, 2003;FATF, 2006, APG, 2012Soudijn, 2014b). Such financial match-making can be undertaken by banks but it can also be done by semi-legitimate networks, usually (for trust and possible extra-legal recourse reasons) within the same ethnic or nationality group.…”

Section: How Are Proceeds Of Crime Concealed?mentioning

confidence: 99%

Money for Crime and Money from Crime: Financing Crime and Laundering Crime Proceeds

Levi

2015

Eur J Crim Policy Res

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This article summarises briefly what is known internationally about how 'organised crimes' are financed and how this differs from the financing of licit businesses. It shows how illicit financing might and does operate, noting that a key issue is the social capital of offenders and their access to illicit finance which ironically, may be easier if controls make it harder to launder money. It then reviews international evidence on how proceeds of crime are laundered, concluding with an examination of the implications of these observations for the study of organised crime and the effects of anti-money laundering efforts. In money laundering cases internationally, the most commonly prosecuted cases are not complicated. This is not evidence that there are no complicated cases, since the proportion of crime proceeds and crime financing that have been subjected to serious investigation is modest. There is a core contradiction between general economic policy pushed hard multilaterally for liberalization of financial flows and a crime control policy intent on hampering them. No-one could rationally think that AML controls in general or financial investigation in particular will 'solve' organised crime completely or eliminate high-level offending: for there even to be a chance to achieve that, there would need to be a step change in transparency and effective action against high-level corruption along all possible supply chains. However more action (not just legislation) on these could facilitate interventions against the more harmful individuals, networks and crime enablers. The less complex financial activities of local drug-dealing gangs can be intervened against, without needing international cooperation or familiarity with sophisticated money laundering typologies.

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Section: How Are Proceeds Of Crime Concealed?mentioning

confidence: 99%

Money for Crime and Money from Crime: Financing Crime and Laundering Crime Proceeds

Levi

2015

Eur J Crim Policy Res

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“…Since then researchers have investigated both machine-learning and traditional statistical approaches to detect money laundering (Irwin et al, 2012, Bidabad, 2017, Chang et al, 2008, Deng et al, 2009, Drezewski et al, 2012, Colladon and Remondi, 2017, Gilmour, 2017, Ju and Zheng, 2009, Ngai et al, 2011, Perols, 2011, Regan et al, 2017, Savage et al, 2016, Savage, 2017, Turner and Irwin, 2018, Unger et al, 2011, Wang et al, 2007, Zdanowicz, 2004a, Zdanowicz, 2009, Zhang et al, 2003, Gao, 2009). Zhang et al authors on using the system on real-world data found it was able to detect suspicious activity with a low rate of false positives.…”

Section: Detection Of Money Launderingmentioning

confidence: 99%

A review of money laundering literature: the state of research in key areas

Tiwari

Gepp

Kumar

2020

PAR

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Purpose:The purpose of this study is to review the literature on money laundering and its related areas. The main objective is to identify any gaps in the literature and direct attention towards addressing them.Design/Methodology/Approach: A systematic review of the money laundering literature was conducted with an emphasis on the Pro-Quest, Scopus and Science-Direct databases. Broad research themes were identified after investigating the literature. The theme about the detection of money laundering was then further investigated. The major approaches of such detection are identified as well as research gaps that could be addressed in future studies. Findings:The literature on money laundering can be classified into the following six broad areas: (i) anti-money laundering framework and its effectiveness, (ii) the effect of money laundering on other fields and the economy, (iii) the role of actors and their relative importance, (iv) the magnitude of money laundering, (v) new opportunities available for money laundering and (vi) detection of money laundering. Most studies about the detection of money laundering have focused on the use of innovative technologies, banking transactions, or real estate and trade-based money laundering. However, the literature on the detection of shell companies being explicitly used to launder funds is relatively scarce.Originality/Value: This paper provides insights into an area related to money laundering where research is relatively scant. Shell companies incorporated in the UK alone were identified to be associated with laundering 80 billion pounds of stolen money between 2010 and 2014. The use of these entities to launder billions of dollars as witnessed through the laundromat schemes and several data leaks clearly indicate the need to focus on illicit financial flows through such entities.

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“…That is, if a customer is determined to have a network of many friends, a firm may reduce advertising costs by marketing to that pivotal customer and getting additional publicity for free, by word-of-mouth. On the other hand, analyses of bank deposits or of import/export data may detect possible money laundering or other criminal events [40]. The discovery of such patterns might lead to preventative measures.…”

Section: Conducting Relevant Research In Computer Sciencementioning

confidence: 99%

An ethnocentric look at the law and technology interface

Fass

2008

SIGSOFT Softw. Eng. Notes

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We often conduct ethnocentric research, observing everyday citizen end-users in their own environments to assess their access, technological and policy concerns. Our recent research has revealed that many end-user concerns are on the interface of Law and Technology. Such interface issues also have become apparent throughout our own interactions with software and the Web, as well as within our specific research into eCommerce; Link Analysis and Data Mining; and the Semantic Web applied to eGovernment and Homeland Security. Among the relevant areas we now address are information security and integrity; barriers (intentional or otherwise) to access; security-privacy trade-offs; the need for user education; and importance of cooperation among stakeholders, policymakers and experts in Technology-related Law. We illustrate that in many policy areas of evolving Law related to Technology there may be no general decision procedure; many decisions can only be made case-by-case. We strongly support ethnocentric studies by practitioners of Software Engineering, experts in Technology Law and policymakers. This can identify specific critical deployment issues that might otherwise be overlooked within traditional research venues. We believe that many end-user concerns on the Law and Technology interface, once recognized, can be alleviated by Software Engineering professionals.

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Detecting money laundering and terrorist financing via data mining

Abstract: Using import-export information to improve financial transaction security.

Cited by 47 publications

References 0 publications

Money for Crime and Money from Crime: Financing Crime and Laundering Crime Proceeds

Money for Crime and Money from Crime: Financing Crime and Laundering Crime Proceeds

A review of money laundering literature: the state of research in key areas

An ethnocentric look at the law and technology interface

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