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Article
Publication date: 6 May 2020

Jeffrey R. Simser

International bodies, such as the Financial Action Task Force , have mandated the use of financial intelligence units (FIU) to address organized crime and money…

Abstract

Purpose

International bodies, such as the Financial Action Task Force , have mandated the use of financial intelligence units (FIU) to address organized crime and money laundering. The purpose of this paper is to examine Canada’s FIU, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and explore its current effectiveness and future challenges.

Design/methodology/approach

This paper examines FIUs in general and then looks more specifically at Canada’s FIU, its policy and legislative basis as well as future challenges for the FIU.

Findings

The challenge money laundering poses to society is a mirror of the challenge that organized crime poses: a test of the values and the importance of rule of law. The FIU is an important mechanism to address this challenge generally, and there are important changes in the environment that must be addressed if the future policy objectives of the FIU are to be met.

Research limitations/implications

Some of the policy nostrums that are baked into the anti-money laundering system, such as placement, layering and integration, need to be revisited and researched to incorporate changes in the licit and illicit marketplaces.

Practical implications

Financial institutions and other intermediaries must comply with domestic anti-money laundering laws. Compliance is always contextual, and this paper will outline the role of the regulator and the environmental challenges that need to be met.

Social implications

Effectively addressing money laundering and organized crime is critical to the maintenance of rule of law and the protection of the financial system.

Originality/value

This is a brief but very fulsome review of Canada’s FIU, FINTRAC, which captures broader challenges in addressing money laundering, economic crime and regulatory systems designed to protect rule of law and the integrity of the financial system. The paper not only examines the current state of the FIU but also explores challenges on the horizon.

Details

Journal of Money Laundering Control, vol. 23 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 1 July 2014

Jeffrey Simser

– The purpose of this paper is to explore the role of the culpable insider and the predatory criminal in fraud and deception.

Abstract

Purpose

The purpose of this paper is to explore the role of the culpable insider and the predatory criminal in fraud and deception.

Design/methodology/approach

Two groupings of fraud are considered in this paper. Insider fraud consists of a person within an organization misusing their position for corrupt self-dealing, asset misappropriation and financial statement fraud. Case studies are discussed, offering differing perspectives on the role of insiders. Fraudsters use technology, like malware, to take on the mantle of an insider to facilitate their larceny. This paper also looks at the role of the insider with predatory frauds.

Findings

Most enterprises, be they public entities or private firms, are at risk of internal fraud. Internal financial controls are the first line of defence. In tougher economic times, when enterprises run on the tightest of margins, control mechanisms are at risk of being weakened at the altar of efficiency. Firms can also adopt cultures that deter frauds, either through policies on whistle-blowers or through simple employee screening procedures. For predatory frauds, the basic warning flag can be summed up with the cliché: if something seems too good to be true, it probably is.

Originality/value

This paper synthesizes research on fraud and the role that an insider can play as well as the role of a predatory fraudster.

Details

Journal of Financial Crime, vol. 21 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 5 May 2015

Jeffrey Simser

This paper aims to explore the challenge posed by Bitcoin to regulators, particularly anti-money laundering regulators. Bitcoin is a crypto-currency based on open-source…

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3843

Abstract

Purpose

This paper aims to explore the challenge posed by Bitcoin to regulators, particularly anti-money laundering regulators. Bitcoin is a crypto-currency based on open-source software and protocols that operates in peer-to-peer networks as a private irreversible payment mechanism. The protocol allows cross-border payments, for large and small items, with little or no transactional costs.

Design/methodology/approach

Case studies and case law are examined as are relevant reports by regulators.

Findings

Bitcoin is based on complex computer code supported by a robust community in a peer-to-peer network. Unlike other virtual currencies, Bitcoin appears to have obtained purchase and as such poses unique challenges to regulators.

Research limitations/implications

Bitcoin is at a nascent stage and the evolution of the virtual currency is difficult to predict.

Practical implications

Those who study financial systems, anti-money laundering regimes and asset forfeiture laws will have an interest in this topic.

Originality/value

This is a new and emerging currency; there is limited literature on the implications of this currency to anti-money laundering systems.

Details

Journal of Financial Crime, vol. 22 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 1 January 2013

Jeffrey Simser

The purpose of this paper is to explore typologies as well as emerging trends and threats in money laundering.

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5352

Abstract

Purpose

The purpose of this paper is to explore typologies as well as emerging trends and threats in money laundering.

Design/methodology/approach

Recent trends and emerging threats in money laundering are discussed, both in terms of predicate activities (drugs, fraud) and in terms of techniques/typologies.

Findings

It is found that the challenges and risks posed by money laundering to financial systems and to the rule of law persist.

Research limitations/implications

Understanding evolving and emerging typologies and techniques is necessary to address money laundering challenges.

Practical implications

Considerable resources are applied by regulators and the regulated to anti‐money laundering systems; this paper provides a measure by which the robustness of those systems can be examined.

Originality/value

This paper provides a succinct but comprehensive overview of the current state of money laundering, as well as a look at emerging threats.

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Article
Publication date: 9 May 2008

Jeffrey Simser

The purpose of this paper is to explore tax evasion and avoidance typologies with a view to understanding how they work and the implications for those who handle the…

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7274

Abstract

Purpose

The purpose of this paper is to explore tax evasion and avoidance typologies with a view to understanding how they work and the implications for those who handle the wealth of others.

Design/methodology/approach

American, Canadian and UK cases of tax avoidance and tax evasion are studied.

Findings

Structuring transactions to avoid or minimize taxes is highly complex, and thus, fraught with risk, particularly for advisors.

Research limitations/implications

Commercial and taxation law in a globalized economy is an ever‐changing matter.

Practical implications

There is an enormous potential for reputational risk which can bear significant consequences for the unwary financial advisor. Money launderers can hide their assets applying methods similar to those used to evade or avoid taxes.

Originality/value

Thousands and thousands of pages documenting tax evasion and avoidance cases have been distilled into an overview paper.

Details

Journal of Money Laundering Control, vol. 11 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 19 July 2011

Jeffrey Simser

The paper aims to explore the penetration of power in Mexico by drug cartels and the attendant policy challenges to address the problem.

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1503

Abstract

Purpose

The paper aims to explore the penetration of power in Mexico by drug cartels and the attendant policy challenges to address the problem.

Design/methodology/approach

The history of unlawful activity and cartels is discussed as well as the policy solutions being explored by the Mexican Government and its partners like the USA.

Findings

The challenges are longstanding, complex and defy simple solutions. Concerted problem solving can change conditions on the ground.

Research limitations/implications

The impact of longer term initiatives to strengthen the rule of law merits further study.

Practical implications

Drug cartels are taking a huge toll on Mexico, particularly in terms of violence; this threatens not only Mexico but neighbouring countries as well.

Originality/value

The problems Mexico faces are placed in historical context and in the context of the larger international trade in illicit drugs.

Details

Journal of Money Laundering Control, vol. 14 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 11 October 2011

Jeffrey Simser

The purpose of this paper is to explore countering the financing of terrorism and its impact on financial institutions.

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14041

Abstract

Purpose

The purpose of this paper is to explore countering the financing of terrorism and its impact on financial institutions.

Design/methodology/approach

Actual examples of terrorist financing are considered, as well as the international and Canadian framework for financial institutions.

Findings

The system for countering the financing of terrorism can be improved to lower costs and risks to financial institutions and to enhance actionable intelligence. A balance must be sought between the objective, actionable intelligence and the mechanism used to advance that objective.

Research limitations/implications

There is limited research on terrorism financing and little statistical data.

Practical implications

Some simple and modest reforms to the framework are suggested; policy makers need to consider their goals and revaluate the existing framework.

Originality/value

There is little writing in this area. This paper would be of interest to financial institutions, regulators, law enforcement and the intelligence community.

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Article
Publication date: 4 January 2008

Jeffrey Simser

The purpose of this paper is to explore the various typologies and methods used to cloak assets following the placement stage of money laundering.

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1689

Abstract

Purpose

The purpose of this paper is to explore the various typologies and methods used to cloak assets following the placement stage of money laundering.

Design/methodology/approach

Techniques used to hide assets and cloak ownership, ranging from simple nominee arrangements through to complex financial transactions are explored.

Findings

There are a myriad of methods available to money launderers to cloak their assets.

Research limitations/implications

More work needs to be done on the issue of information gateways.

Practical implications

Assets are cloaked to obfuscate the trail and make it difficult for law enforcement to “follow the money”. Understanding the methodologies used is the first step to understanding the problem.

Originality/value

A number of cases from Canada, the USA and Australia were studied, as well as reference material advisors use for asset protection.

Details

Journal of Money Laundering Control, vol. 11 no. 1
Type: Research Article
ISSN: 1368-5201

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Article
Publication date: 1 July 2006

Jeffrey Simser

The purpose of this paper is to examine money laundering generally and the response of one jurisdiction, the Philippines, to international pressure for anti‐money…

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973

Abstract

Purpose

The purpose of this paper is to examine money laundering generally and the response of one jurisdiction, the Philippines, to international pressure for anti‐money laundering measures.

Design/methodology/approach

Money laundering is examined and described. The source of international consensus around the problem is considered. The multilateral response, including the pressure placed on the Philippines as a formerly non‐compliant jurisdiction is examined. The initial measures of the Philippines were rejected. Finally the Philippine solutions that ultimately met with international approval are discussed: the establishment of a financial intelligence unit, the regulation of financial intermediaries and the provision of criminal and remedial measures are considered. Civil or non‐conviction based forfeiture as a remedial device is given particular attention. Finally the limited jurisprudence on topic is examined.

Findings

The Republic of the Philippines has put forward anti‐money laundering provisions that hold the prospect for success. Implementation will be challenging.

Research limitations/implications

Jurisprudence is still developing. This type of litigation takes time. As the financial investigation unit, the intermediaries and the courts respond to cases, there will be developments worthy of further research.

Practical implications

This paper looks at an international problem, money laundering, the multi‐lateral response (only Nigeria and Myanmar are non‐compliant) and the impact on the Philippines, their financial institutions and laws.

Originality/value

There is no comprehensive overview of the Philippine anti‐money laundering law currently available. There is a book published out of Manila (quoted in the paper) but it is out of date and has not caught up to recent developments.

Details

Journal of Money Laundering Control, vol. 9 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 20 July 2010

Jeffrey Simser

The purpose of this paper is to present a discussion of the corrosive effects of corruption and techniques, both criminal and civil to recover the proceeds of corruption.

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970

Abstract

Purpose

The purpose of this paper is to present a discussion of the corrosive effects of corruption and techniques, both criminal and civil to recover the proceeds of corruption.

Design/methodology/approach

The paper examines the Canadian and international perspective on the issue.

Findings

Civil asset recovery is a viable technique although there are a number of barriers that need to be addressed.

Research limitations/implications

Further research on the effectiveness of recovery measures needs to be conducted.

Practical implications

The paper examines the practical implications of the asset recovery techniques to address corruption.

Originality/value

Perspectives on asset recovery are brought to bear from an anti‐money laundering and forfeiture practitioner.

Details

Journal of Financial Crime, vol. 17 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

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