Zengan Gao and Mao Ye
The purpose of this paper is to propose a framework for data mining (DM)‐based anti‐money laundering (AML) research.
Abstract
Purpose
The purpose of this paper is to propose a framework for data mining (DM)‐based anti‐money laundering (AML) research.
Design/methodology/approach
First, suspicion data are prepared by using DM techniques. Also, DM methods are compared with traditional investigation techniques. Next, rare transactional patterns are further categorized as unusual/abnormal/anomalous and suspicious patterns whose recognition also includes fraud/outlier detection. Then, in summarizing the reporting of money laundering (ML) crimes, an analysis is made on ML network generation, which involves link analysis, community generation, and network destabilization. Future research directions are derived from a review of literature.
Findings
The key of the framework lies in ML network analysis involving link analysis, community generation, and network destabilization.
Originality/value
The paper offers insights into DM in the context of AML.
Details
Keywords
The purpose of this paper is to make objective descriptions on various money‐laundering techniques and to put forward countermeasures in order to combat money laundering more…
Abstract
Purpose
The purpose of this paper is to make objective descriptions on various money‐laundering techniques and to put forward countermeasures in order to combat money laundering more effectively and efficiently.
Design/methodology/approach
This paper based on 20 simplified money‐laundering cases, describes various money‐laundering techniques, analyses the reasons why these methods prevail, and points out the future efforts to be made in the fight against money laundering.
Findings
As usual, the ways of money laundering include cash smuggling, making use of banks or insurance company, or making use of shell‐company or front‐company. Nowadays, criminals also turn to real estate, lottery, international trade, offshore company to launder money. Sometimes lawyers, accountants are exploited by money launderers. With the wide use of electronic money and internet, criminals prefer to launder money through non‐face to face transactions. The fight against money laundering is the fight between justice and evil. It is of great importance to pierce the secret veil of money laundering so that we can combat money laundering more effectively and efficiently.
Originality/value
This paper prevents a comprehensive description of, and comments on, various money‐laundering techniques and future efforts to be made in the fight against money laundering, which would be beneficial to policy makers, enforcement authorities, and judicial professionals.