Foundations · about 10 min
What financial crime is
Three areas of risk
Financial crime covers a wide range of offenses. Most of the alerts an investigator reviews fall into three areas.
- Money laundering: disguising the criminal origin of funds so they can be used without attracting attention. The funds already exist; the objective is to conceal where they came from.
- Fraud: deceiving a person or organization into handing over money, assets, or access. The customer, or the institution itself, is usually the victim, and losses can still be prevented.
- Sanctions: legal restrictions on dealing with designated people, companies, vessels, and countries. A transaction can breach sanctions even when the funds are entirely legitimate.
The three areas overlap. Fraud generates criminal proceeds, those proceeds are then laundered, often through money mule accounts, and a single case can involve all three.
Sort it
Which area does each situation fall into?
A customer is tricked into paying a fake invoice that looks like it came from their builder.
Cash from drug sales is deposited at several branches, then wired abroad.
A legitimate engineering firm ships spare parts to a company owned by a designated person.
An account receives payments from scam victims and forwards them to a crypto exchange within hours.
Someone logs into a customer's account from a new phone, changes the email address, and pays a new payee.