NEW TRENDS IN COMBATING FRAUD AND MONEY LAUNDERING: SOCIAL STATUS LAUNDERING

Marius Burca

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2015, vol. 9, issue 1, 794-800

Abstract: This paper presents a new approach to integrating anti-fraud and anti-money laundering controls into one single financial crime prevention and early detection policy. The current best practices, as illustrated by the regulations such as the Fourth Anti-Money Laundering EU Directive shift the focus to the legal aspects of incriminating money laundering as a separate and following offence, usually after the underlying crime has been charged. In contrast, this paper takes a management viewpoint, rather than the legal one, and explores the benefits of prevention and early detection by observing the red-flags such as the social status laundering alerts for tell-tale of possible frauds which need closer examination. The author promotes a linear equation (with fraud and money laundering variables) which is balanced by the newly introduced parameter called Social Status Laundering. Hence, the author shows that ultimately all fraud leads to money laundering alerts and so by installing anti-money laundering controls (alongside the anti-fraud controls) organisations would be able to better prevent deviant behaviour and detect fraud more efficiently. However, the anti-money laundering controls should be dealt with caution as it may interfere with personal privacy.

Keywords: fraud; money laundering; social status laundering. (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:rom:mancon:v:9:y:2015:i:1:p:794-800

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