Part
01
of six
Part
01
Global Money Laundering - Trends
Five of the biggest trends in global money laundering include money laundering cases that involve cryptocurrency, criminals offering 'crime as a service' (CaaS), money muling, money laundering in real estate, and prevalent cybercriminal activities for money laundering.
1. Money Laundering Cases that Involve Cryptocurrency
WHY IS IT A TREND?
- There is an increase in money laundering cases that involve cryptocurrency as reported by Japan Times since 2018. This trend showed a dramatic increase from the data reported in 2017. While the number of reported cases did see a huge increase, it represents only 1.6% of the total number of money laundering cases in the country.
- The U.S. Drug Enforcement Administration (DEA) reported that bitcoin is being used to facilitate trade-based money laundering (TBML) schemes. DEA mentioned that bitcoin is widely popular in China and it can be used to anonymously transfer value overseas, circumventing China’s capital controls. Many China-based firms manufacturing goods now prefer to accept Bitcoin.
- DEA also reported that China-based groups prefer using the cryptocurrency in an effort to bypass capital controls and it is believed that the OTC bitcoin brokers will continue to help facilitate the cross-border transactions.
- According to PWC, the use of digital currencies to launder illicit money is a growing trend based on the data gathered from criminal proceeds being laundered in Europe, Russia, and Iran through cryptocurrencies.
HOW IS IT A BIG TREND?
- Organizations such as PWC and the U.S. Drug Enforcement Administration (DEA) reports money laundering cases from several countries including the United States, China, Europe, Russia, and Iran. Another media page such as Japan Times also published reports on this trend.
2. Criminals Offering 'Crime as a Service' (CaaS)
WHY IS IT A TREND?
- There are a growing number of cases that involves criminals offering “crime as a service” (CaaS) based on the joint effort of Spanish law enforcement and Europol. This trend is a large-scale cryptocurrency money laundering operation that was offering services to other criminal organizations.
- Reports also mentioned that similar incidents took place last year when the police department in Spain and Colombia arrested members of two criminal gangs involved in cryptocurrency money laundering.
- Europol stated that an increasing number of individual criminal entrepreneurs offer crime as a service (CaaS) in the European Union Serious and Organized Crime Threat Assessment (SOCTA) 2017. Online trade enables individual criminals to operate their own criminal business without the need for the infrastructures maintained by ‘traditional’ organized crime groups.
HOW IS IT A BIG TREND?
- Media pages/organizations such as OCCRP and Micky Media reported criminal cases offering 'crime as a service' (CaaS) with official reports from the Europol, the European Union Agency for Law Enforcement Cooperation involving criminal arrests from Spain, Columbia, and New York.
3. Money Mules
WHY IS IT A TREND?
- According to Wikipedia, "a money mule, sometimes called a 'smurfer', is a person who transfers money acquired illegally (e.g., stolen) in person, through a courier service, or electronically, on behalf of others. Money muling has grown to such an extent that Southern African Fraud Prevention Service (SAFPS) has opened a new category of fraud due to the increasing number of bank accounts that have been abused by third parties in this manner.
- The Australian Banking Association Inc. also reported how criminals include unsuspecting innocent people in their illegal activities. Global scam methods include fraudulent employment advertisements posted online, emails that are sent to random addresses, and romance scams where vulnerable singles are targeted and asked to receive money and send it to a third party.
- 2017 statistics from CIFAS, the UK’s fraud prevention service released data that showed a 75% rise in the number of 18 to 24 year old’s who are letting their bank accounts be used to transfer the proceeds of crime. The facilitation of proceeds of crime through ‘mule accounts’ is a growing financial crime risk, especially for the retail banking industry. It was also reported that 65% of the 17,040 incidents in the UK in the first six months of 2017 were committed by those under 30.
- Europol has also noted the rapid growth of money mule activity, nearly 90% of which relates to cybercrime owing to the widespread availability of online bank accounts.
- Money muling is one of the seemingly endless cycles of money-laundering schemes that law enforcement officials are scrambling to slow through a combination of prosecution and public awareness. Europol had identified 1,504 money mules and arrested 168 in a continent-wide bust, while FBI announced the arrests of 74 people, including 29 in Nigeria, for schemes targeting businesses and the elderly.
HOW IS IT A BIG TREND?
- Media pages such as CBS News, Bizcommunity, Independent, and organizations such as Australian Banking Association Inc., Europol, CIFAS, and Southern African Fraud Prevention Service (SAFPS) published reports on the increasing growth of money mule activity globally.
4. Money Laundering in Real Estate
WHY IS IT A TREND?
- Accuity, a global risk and compliance company reported that money laundering through real estate is a growing, worldwide problem. It is estimated to have reached USD 1.6 trillion a year. Several cases from China, Venezuela, Azerbaijan, Vancouver, Manhattan, and London involved a list of suspects accused of using their ill-gained financial proceeds to purchase properties at some of the most exclusive addresses in the world.
- It has become increasingly apparent in countries such as America, Australia, and the United Kingdom that a number of assets being purchased could be linked to political or criminal activities where money laundering can occur.
- Government organizations such as the U.S. Treasury Department, The British Parliament, and Germany lawmakers are making efforts to help combat scams in real estate.
- The impacts of money laundering in the real estate market in B.C. have pushed the prices by 3.7% to 7.5%. B.C is one of the most unaffordable real estate markets in the world.
HOW IS IT A BIG TREND?
- Realtor Magazine, South China Morning Post, and Global News are some of the many media pages that reported money laundering cases in real estate properties around the world.
5. Prevalent Cybercriminal Activities for Money Laundering
WHY IS IT A TREND?
- A comprehensive research study by Bromium®, Inc. reveals cybercriminal proceeds make up an estimated 8-10% of total illegal profits laundered globally. Virtual currencies have become the primary tool used by cybercriminals for money laundering while other methods include the usage of PayPal and other digital payment systems. Digital payment systems laundering often involves the use of micro-laundering techniques where multiple small payments are made so laundering limits aren’t triggered.
- Laundering through in-game currency and goods is also on the rise and the trend is prevalent in countries like South Korea and China.
- A study led by Michael McGuire, the senior lecturer in criminology at Surrey University revealed that there is a growing use of digital payment systems by cybercriminals that are creating significant problems for the global financial system.
- Cybercriminals are responsible for up to 10% of the total illegal profits being laundered globally and they are using combination methods such as new cryptocurrencies, gaming currencies, and micro-payments to launder up to $200 billion via ill-gotten gains.
- Cybercriminal activity in underground markets noted a spike in overall malware detection from the last quarter of 2017 to the start of 2018, mostly from Turkey, the United Arab Emirates (UAE), and Saudi Arabia. Based on the MENA underground report in 2017, different aspects of cybercriminal activity reported cashout services that were widespread in the underground. In multiple underground forums, these money laundering operations are found in dedicated sections called 'broker' services or 'contracts'.
HOW IS IT A BIG TREND?
- Media reports from Cyber Security Intelligence, Globe Newswire, Trend Micro, Bromium, Surrey University, and MENA published cybercriminal activities/news related to money laundering globally.
YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:
We were able to gather information on the current trends in global money laundering from media articles, financial and banking domains, and government, university and non-profit organization research portals. Trends that appeared in multiple sources have been presented in this brief.
The 'biggest' trends in global money laundering were determined based on the data pertaining to different countries and their prevalence.
Most of these trends are expected to grow, increase or continue as technology is upgraded even further and more criminal methods emerge. Authorities from government agencies globally are enacting by submitting bills and rules to resolve these activities.
The key findings are of global scope and represent different cases, activities, or techniques in money laundering. We only included trends related to the process by which money is obtained illegally, laundering methods, amounts of money laundered, and the type of businesses used for laundering.