Money Laundering-as-a-Service: An Empirical Analysis on False Invoicing Providers

• In Event: Emerging Money Laundering Methods: The Impact on Criminal Offenders and the Role of Enablers

Abstract

False invoicing (the issuance of invoices for services that do not exist, or whose value does not correspond to the actual value of what is exchanged) is one of the most neglected crimes by criminological research. However, it has become a key offense in most of nowadays organized and financial crime schemes, including mafia-type ones. False invoicing serves for multiple purposes – reduce tax burden, reduce corporate costs, create slash funds, launder money. By carrying out an empirical analysis of several dozens of cases of false invoicing detected in Italy, this paper provides a sociological and criminological interpretation of why this offence is employed, by whom it is exploited and who provides these criminal services. The analysis reveals the existence of dedicated providers, including foreign individuals and organizations, who are specialized in money laundering-as-a-service through false invoicing. In so doing, false invoicing has been radically changing not only the evolution of the money laundering market, but also the nature of predicate crimes too, including traditional mafia behaviors. This paper is based on the analysis carried out within project FALCON.

Author

• Michele Riccardi, Transcrime - Università Cattolica del Sacro Cuore