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

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.

Citation

Roman, J., Machuca, A. and Schaefer, T. (2022), "Estimating the destination of Mexican-based laundered funds: an application of the modified Walker-Unger model", Journal of Money Laundering Control, Vol. 25 No. 1, pp. 224-248. https://doi.org/10.1108/JMLC-01-2021-0008