Financial crime is
crime
In ordinary language, a crime is an unlawful act punishable by a State (polity), state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally accepted definition,Farmer, Lindsay: "Crime, definit ...
committed against
property
Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
, involving the unlawful
conversion
Conversion or convert may refer to:
Arts, entertainment, and media
* "Conversion" (''Doctor Who'' audio), an episode of the audio drama ''Cyberman''
* "Conversion" (''Stargate Atlantis''), an episode of the television series
* "The Conversion" ...
of the ownership of
property
Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
(belonging to one person) to one's own personal use and benefit. Financial crimes may involve
fraud
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
(
cheque fraud
Cheque fraud (Commonwealth English), or check fraud (American English), refers to a category of criminal acts that involve making the unlawful use of cheques in order to illegally acquire or borrow funds that do not exist within the account balan ...
,
credit card fraud
Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The P ...
,
mortgage fraud
Mortgage fraud refers to an intentional misstatement, misrepresentation, or omission of information relied upon by an underwriter or lender to fund, purchase, or insure a loan secured by real property.
Criminal offenses may be prosecuted in eith ...
,
medical fraud, corporate fraud,
securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in los ...
(including
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
),
bank fraud
Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many ins ...
,
insurance fraud
Insurance fraud is any act committed to defraud an insurance process. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. According to the ...
,
market manipulation
In economics and finance, market manipulation is a type of market abuse where there is a deliberate attempt to interfere with the free and fair operation of the market; the most blatant of cases involve creating false or misleading appearances ...
, payment (
point of sale
The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice f ...
) fraud,
health care fraud
Health care fraud includes "snake oil" marketing, health insurance fraud, drug fraud, and medical fraud. Health insurance fraud occurs when a company or an individual defrauds an insurer or government health care program, such as Medicare (United S ...
);
theft
Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for some ...
;
scams or confidence tricks;
tax evasion
Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
;
bribery
Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
;
sedition
Sedition is overt conduct, such as speech and organization, that tends toward rebellion against the established order. Sedition often includes subversion of a constitution and incitement of discontent toward, or insurrection against, estab ...
;
embezzlement
Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...
;
identity theft
Identity theft occurs when someone uses another person's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term ''identity theft'' was co ...
;
money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
; and
forgery
Forgery is a white-collar crime that generally refers to the false making or material alteration of a legal instrument with the specific intent to defraud anyone (other than themself). Tampering with a certain legal instrument may be forbidd ...
and
counterfeit
To counterfeit means to imitate something authentic, with the intent to steal, destroy, or replace the original, for use in illegal transactions, or otherwise to deceive individuals into believing that the fake is of equal or greater value tha ...
ing, including the production of
counterfeit money
Counterfeit money is currency produced without the legal sanction of a state or government, usually in a deliberate attempt to imitate that currency and so as to deceive its recipient. Producing or using counterfeit money is a form of fraud or fo ...
and
consumer goods
A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, but ...
.
Financial crimes may involve additional criminal acts, such as
computer crime
A cybercrime is a crime that involves a computer or a computer network.Moore, R. (2005) "Cyber crime: Investigating High-Technology Computer Crime," Cleveland, Mississippi: Anderson Publishing. The computer may have been used in committing th ...
and
elder abuse
Elder abuse (also called "elder mistreatment", "senior abuse", "abuse in later life", "abuse of older adults", "abuse of older women", and "abuse of older men") is "a single, or repeated act, or lack of appropriate action, occurring within any rela ...
and even
violent crimes
A violent crime, violent felony, crime of violence or crime of a violent nature is a crime in which an offender or perpetrator uses or threatens to use harmful force upon a victim. This entails both crimes in which the violent act is the objecti ...
such as
robbery
Robbery is the crime of taking or attempting to take anything of value by force, threat of force, or by use of fear. According to common law, robbery is defined as taking the property of another, with the intent to permanently deprive the perso ...
,
armed robbery
Robbery is the crime of taking or attempting to take anything of value by force, threat of force, or by use of fear. According to common law, robbery is defined as taking the property of another, with the intent to permanently deprive the perso ...
or
murder
Murder is the unlawful killing of another human without justification (jurisprudence), justification or valid excuse (legal), excuse, especially the unlawful killing of another human with malice aforethought. ("The killing of another person wit ...
. Financial crimes may be carried out by individuals,
corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
s, or by
organized crime
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
groups. Victims may include individuals, corporations, governments, and entire economies.
Law enforcement
Law enforcement is the activity of some members of government who act in an organized manner to enforce the law by discovering, deterring, rehabilitating, or punishing people who violate the rules and norms governing that society. The term en ...
often classifies larger forms of financial collusion as criminal syndicates.
Bribery
The U.S. introduced the
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
The FCPA is applicable world ...
in 1977 to address bribery of foreign officials. This legislation dominated international anti-corruption enforcement until around 2010 when other countries began introducing broader and more robust legislation, notably the United Kingdom
Bribery Act 2010
The Bribery Act 2010 (c.23) is an Act of the Parliament of the United Kingdom that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act rec ...
. The International Organization for Standardization introduced an international anti-bribery management system standard in 2016. In recent years, cooperation in enforcement action between countries has increased.
Money laundering
For most countries, money laundering and
terrorist financing
Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors.
Most countries have implemented measures to counter terrorism financing (CTF) often as part of their money laundering l ...
raise significant issues with regard to prevention, detection and prosecution. Sophisticated techniques used to launder money and finance terrorism add to the complexity of these issues. Such sophisticated techniques may involve different types of financial institutions; multiple financial transactions; the use of intermediaries, such as financial advisers, accountants, shell corporations and other service providers; transfers to, through, and from different countries; and the use of different financial instruments and other kinds of value-storing assets. Money laundering is, however, a fundamentally simple concept. It is the process by which proceeds from a criminal activity are disguised to conceal their true origin. Basically, money laundering involves the proceeds of criminally derived property rather than the property itself.
Money laundering can be defined in a number of ways, most countries subscribe to the definition adopted by the
(1988) (Vienna Convention) and the
United Nations Convention Against Transnational Organized Crime
The United Nations Convention Against Transnational Organized Crime (UNTOC, also called the Palermo Convention) is a 2000 United Nations-sponsored multilateral treaty against transnational organized crime.
History
The convention was adopted by a r ...
(2000) (Palermo Convention):
The
Financial Action Task Force on Money Laundering
The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, ''Groupe d'action financière'' (GAFI), is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat m ...
(FATF), which is recognized as the international standard setter for Anti-money Laundering (AML) efforts, defines the term "money laundering" briefly as "the processing of criminal proceeds to disguise their illegal origin" in order to "legitimize" the ill-gotten gains of crime.
In 2005, money laundering within the financial industry in the UK was believed to amount to £25bn a year.
In 2009, a
United Nations Office on Drugs and Crime
The United Nations Office on Drugs and Crime (UNODC; French: ''Office des Nations unies contre la drogue et le crime'') is a United Nations office that was established in 1997 as the Office for Drug Control and Crime Prevention by combining the ...
(UNODC) study estimated that criminal proceeds amounted to 3.6% of
global GDP
The gross world product (GWP) is the combined gross national income of all the countries in the world. Because imports and exports balance exactly when considering the whole world, this also equals the total global gross domestic product (GDP).Se ...
, with 2.7% (or USD 1.6 trillion) being laundered.
The Irish Department of Housing urged minister
Darragh O’Brien to “ask in the strongest terms for the UAE to account for its relationship to
Daniel Kinahan
Daniel Joseph Kinahan (born 25 June 1977) is an Irish boxing promoter and suspected crime boss. He has been named by the High Court of Ireland as a senior figure in organised crime on a global scale. The Criminal Assets Bureau has stated he " ...
” a drug kingpin charged along with his brother, Christopher Kinahan in 2018 by the High Court of controlling and managing the daily drug operations in
Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
. The Kinahan brothers are sons of the Kinahan Cartel founder, Christy Kinahan Senior, who smuggled drugs and firearms into the
UK,
Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
, and mainland
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
for a long. For several years, the Kinahan leadership had been residing in Dubai, where Daniel denied his involvement in organized crime by defending himself as a ‘high-profile businessman in the professional boxing industry’. According to Panorama investigation, Daniel has operated in the boxing industry through MTK and simultaneously operated Europe’s biggest money laundering, drug trafficking, and gangland executions networks from Dubai. A spokesperson for minister O’Brien said, “respect for human rights is a cornerstone of Ireland’s foreign policy,” when asked if the minister would raise the concerns regarding Daniel’s presence and operations in Dubai on his visit in March 2022 for
St Patrick’s Day
Saint Patrick's Day, or the Feast of Saint Patrick ( ga, Lá Fhéile Pádraig, lit=the Day of the Festival of Patrick), is a cultural and religious celebration held on 17 March, the traditional death date of Saint Patrick (), the foremost pat ...
.
Fraud
In 2005, fraud within the financial industry was estimated to cost the UK £14 billion a year.
Law enforcement agencies
There are law enforcement agencies whose main enforcement activities focus on criminal violations of their country's tax code and related financial crimes, such as money laundering, currency violations, tax-related identity theft fraud, and terrorist financing. Some of these law enforcement agencies are:
*
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
-
Australian Taxation Office
The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuati ...
*
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
-
Canada Revenue Agency
The Canada Revenue Agency (CRA; ; ) is the revenue service of the Canadian federal government, and most provincial and territorial governments. The CRA collects taxes, administers tax law and policy, and delivers benefit programs and tax credit ...
*
Mexico
Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
-
Unidad de Inteligencia Financiera
*
Netherlands
)
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, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
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-
Fiscale Inlichtingen- en Opsporingsdienst
*
Nigeria
Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf o ...
-
Economic and Financial Crimes Commission
The Economic and Financial Crimes Commission (EFCC) is a Nigerian law enforcement agency that investigates financial crimes such as advance fee fraud (419 fraud) and money laundering. The EFCC was established in 2003, partially in response to pre ...
*
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
-
Her Majesty's Revenue & Customs
HM Revenue and Customs (His Majesty's Revenue and Customs, or HMRC) is a non-ministerial government department, non-ministerial Departments of the United Kingdom Government, department of the His Majesty's Government, UK Government responsible fo ...
*
United States of America
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territo ...
-
Internal Revenue Service, Criminal Investigation
See also
*
Black market
A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the se ...
*
Credit card fraud
Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The P ...
*
Financial Crimes Enforcement Network
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terr ...
*
Financing of terrorism
Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors.
Most countries have implemented measures to counter terrorism financing (CTF) often as part of their money laundering la ...
*
Fraud
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
*
Greenmail
Greenmail or greenmailing is the action of purchasing enough shares in a firm to challenge a firm's leadership with the threat of a hostile takeover to force the target company to buy the purchased shares back at a premium in order to prevent the ...
*
Grey market
A grey market or dark market (sometimes confused with the similar term " parallel market") is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market pr ...
*
Mafia
"Mafia" is an informal term that is used to describe criminal organizations that bear a strong similarity to the original “Mafia”, the Sicilian Mafia and Italian Mafia. The central activity of such an organization would be the arbitration of d ...
*
Money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
*
Organized crime
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
*
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in los ...
*
Skimming (casinos)
A form of white-collar crime, skimming is taking cash "off the top" of the daily receipts of a business (or from any cash transaction involving a third interested party) and officially reporting a lower total. The formal legal term is defalcation ...
*
Skimming (fraud)
A form of white-collar crime, skimming is taking cash "off the top" of the daily receipts of a business (or from any cash transaction involving a third interested party) and officially reporting a lower total. The formal legal term is defalcation. ...
*
Structuring
Structuring, also known as smurfing in banking jargon, is the practice of executing financial transactions such as making bank deposits in a specific pattern, calculated to avoid triggering financial institutions to file reports required by law ...
(smurfing)
*
Tax haven
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
*
White-collar crime
The term "white-collar crime" refers to financially motivated, nonviolent or non-directly violent crime committed by individuals, businesses and government professionals. It was first defined by the sociologist Edwin Sutherland in 1939 as "a ...
*
World Bank residual model
*
Wood laundering
Illegal logging is the harvest, transportation, purchase or sale of timber in violation of laws. The harvesting procedure itself may be illegal, including using corrupt means to gain access to forests; extraction without permission, or from a pro ...
References
External links
Havocscope Black Markets - Database on black market activities such as money laundering and tax evasion.*
ttp://ec.europa.eu/internal_market/company/financial-crime/index_en.htm EU financial crimes websiteInternational cooperation on money laundering and FATF
{{Authority control
*
Property crimes