Money laundering as a service: Investigating business-like behavior in money laundering networks in the Netherlands

Abstract

In order to launder large amounts of money, (drug) criminals can seek help from financial facilitators. According to the FATF, these facilitators are operating increasingly business-like and even participate in professional money laundering networks. This study examines the extent to which financial facilitators in the Netherlands exhibit business-like characteristics and the extent to which they organize themselves in money laundering networks. We further examine the relationship between business-like behavior and individual money launderers’ position in the social network. Using police intelligence data, we were able to analyze the contacts of 198 financial facilitators who were active in the Netherlands in the period 2016–2020, all having worked for drug criminals. Based on social network analysis, this research shows that financial facilitators in the Netherlands can be linked in extensive money laundering networks. Based on the facilitators’ area of expertise, roughly two main types of professional money laundering networks can be discerned. Some subnetworks operate in the real estate sector, while others primarily engage in underground banking. Furthermore, the application of regression models to predict business-like behavior using individual network measures shows that facilitators with more central positions in the network and those who collaborate with financial facilitators from varying expertise groups tend to behave more business-like than other financial facilitators.

Cleaning mafia cash: An empirical analysis of the money laundering behaviour of 2800 Italian criminals

“…Previous empirical studies have focused on several areas of interest in this research domain, such as the type of ML methods (see, e.g., Irwin et al, 2011;Matanky-Becker and Cockbain, 2021), the investment strategy of organised crime groups (see, e.g., Dugato et al, 2015;Kruisbergen et al, 2015;Riccardi, 2014), the extent of the involvement of professionals and financial facilitators (see, e.g., Cummings and Stepnowsky, 2010;Kramer et al, 2023;Malm and Bichler, 2013), and transnational illicit financial flows (see, e.g., Cassetta et al, 2014;Gara and De Franceschis, 2015). Key trends and patterns emerging from the existing literature are discussed below.…”

The effect of the banking supervision on anti-money laundering

“…Money laundering as an international crime appeared a long time ago, to be precise, since 1930 in the United States (Fauzia & Hamdani, 2022). To study money laundering, it should be clear which funds from a legitimate source and which funds from an illegal source in the literature are money laundering (Kramer, Blokland, Kleemans, & Soudijn, 2023).…”