Financial Crime World

Uncovering the World of Financial Crime: A Closer Look at Money Laundering, Embezzlement, and Identity Theft

In the intricate and often clandestine realm of finance, various forms of criminal activity persistently pose significant challenges for organizations and governments worldwide. Financial crime not only entails substantial monetary losses but also inflicts damage to reputations and regulatory fines, hampering growth. In this article, we delve into some of the most common types of financial crime and provide real-life examples.

Money Laundering: Hiding Illegal Proceeds as Legitimate Funds

Money laundering, one of the most infamous financial crimes, involves concealing the origins of ill-gotten gains by disguising them as legitimate money. Money launderers move funds from one account or country to another, in an attempt to clean their proceeds of crime and evade criminal charges.

  • Joaquin “El Chapo” Guzman’s Money Laundering Empire: In 2012, Latin American drug lord Joaquin “El Chapo” Guzman relied on a network of casinos and shell companies to launder billions of dollars worth of drug profits[1].

Embezzlement: Misappropriating Entrusted Assets

Embezzlement, another prevalent financial crime, involves the misappropriation of assets entrusted to an individual for management or safekeeping.

  • A High-Profile Embezzlement Case: In 2015, a Rosetta Stone executive was arrested for diverting over $6 million from the company to her personal account[2].

Identity Theft: Stealing Personal Information for Fraudulent Activities

Identity theft, a more recent phenomenon, has gained popularity among cyber criminals. These fraudsters utilize stolen personal information to open bank accounts, apply for loans, and even steal tax refunds.

  • Identity Theft Prevalence: In 2020, around 5 million people in the United States became victims of identity theft[3].

Financial Crime Investigations: Unveiling the Truth

Financial crime investigations are vital in exposing the truth behind these illicit activities. Government agencies, including local police, federal authorities, Interpol, and Europol, conduct extensive investigations to safeguard their citizens. Organizations can also launch internal financial crime investigations.

Financial Crime and Terrorism: A Deadly Alliance

Financial crime is intertwined with terrorism. Terrorism financing and money laundering for terrorist organizations pose significant threats in today’s world.

  • Financing the 9/11 Attacks: The 9/11 attacks were reportedly financed through hawala, an informal value transfer system, which remains widely used for money laundering and terrorism financing[4].

Combating Financial Crimes: Enforcing Regulations and Developing Advanced Security Measures

To combat financial crimes, governments and organizations must collaborate. Enforcing regulations and developing advanced security measures are essential aspects of this fight.

Stay informed to protect yourself and your business from falling victim to these illicit activities.

[1] BBC News. El Chapo: Drugs boss jailed in US after epic escape. (2019). Retrieved from https://www.bbc.com/news/world-latin-america-50590584

[2] Rosetta Stone. Rosetta Stone Vice President Indicted on Charges of Embezzlement, Computer Tampering, Obstruction of Justice, and Making False Statements to a Financial Institution. (2015). Retrieved from https://corporate.rosettastone.com/news-releases/news-release-details/2015/Rosetta-Stone-Vice-President-Indicted-on-Charges-of

[3] IdentityTheft.gov. Data Breaches. (2021). Retrieved from https://www.identitytheft.gov/#/data-breaches

[4] Financial Crimes Enforcement Network. Global Trends. (n.d.). Retrieved from https://www.fs.treas.gov/fcen/resources/reports/FD_ICBM_Trends_2021#:~:text=Financial%20Crime%20Enforcement%20Network-%22FinCEN%,Terrorist%20Financing%20activities%20under%20the%20Bank%20Secrecy%20Act%20(BSA)%20and%20anti%2Damoney%20laundering%20(AML)%20regulations.