What determines the sophistication of an offender’s money laundering methods?

• In Event: The variety of money laundering: empirical research and criminological perspectives (EUROC)

Abstract

Those with criminal earnings have many choices of how to launder the money. At one end of the spectrum is the simple deposit of many small amounts of cash into a large number of bank accounts, time consuming but available to any drug dealer with more cash than they want to spend on everyday items. At the other extreme are exotic and complex schemes involving multiple professionals, Luxembourg and Cayman Island trusts and Nevada shell companies. What determines which of these many schemes the criminal offender chooses? In this primarily conceptual paper we suggest the choice is influenced by a variety of determinants, including: the amount to be laundered, the nature of the earnings (cash vs. electronic assets), characteristics of the offender (age, education, social position) and the level of AML controls. From existing cases, we provide examples of choices and what might account for them. This paper follows up the ESC 2022 presentation, providing substantial additions.

Authors

• Peter Reuter, University of Maryland

• Michele Riccardi, Transcrime - Università Cattolica del Sacro Cuore