Estimating the destination of Mexican-based laundered funds: an application of the modified Walker-Unger model

Juan Roman, Ana Machuca and Thomas Schaefer

Journal of Money Laundering Control, 2021, vol. 25, issue 1, 224-248

Abstract: Purpose - This study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period. Design/methodology/approach - The modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance. Findings - Model results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015). Research limitations/implications - Timing and availability of reliable data after 2015. Practical implications - Aids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity. Social implications - May aid policymakers in targeting anti-money laundering policy to more relevant countries. Originality/value - The first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

Keywords: Mexico; Money laundering; Illicit finance; Walker-Unger model (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-01-2021-0008

DOI: 10.1108/JMLC-01-2021-0008

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