Journal of Financial Crime

Emerald Group Publishing Limited
Publication date:

Latest documents

  • Editorial: The ascent of green crime: exploring the nexus between the net zero transition and organized crime
  • Editorial
  • Fighting economic crime during the pandemic: a Sri Lankan perspective

    Purpose: The purpose of this paper is to understand the dual crisis in Sri Lanka during the pandemic. The health crisis was followed by democratic backsliding which directly impacted the fight for economic crime. The pre-pandemic political commitment to fight corruption is assessed with the pandemic environment and the policy decisions by the Government. Sri Lanka was a detailed case study of how politicians exploited the pandemic environment to suppress democracy and move their semi-autocratic agenda forward. However, Sri Lanka was not the only nation that faced such autocratic sentiments losing the democratic values. This paper discusses recommendations for improving the resources and investment to address economic crime in Sri Lanka. Design/methodology/approach: Secondary data was used for the analysis introducing a theoretical framework referring to the work of Michel Foucault and Francis Fukuyama. The secondary data was used to develop an argument aligning political science with economic crime. Findings: The Government disciplinary project launched during the pandemic directly impacted Sri Lankan democracy and structural changes made to the constitution. The heavy militarization was a sign of departure of long-cherished values of democracy in the country. Political clientelism backed by nepotism interfered with judicial independence and the fight against economic crime. Many accused, including those responsible for the largest corruption scandal, were not punished. The trust deficit has widened significantly between authorities and the public on fighting corruption in Sri Lanka. Research limitations/implications: There are more factors for democratic backsliding than what is presented in this paper. The economic crime environment in Sri Lanka has many dimensions and the paper only highlights a few areas limiting to the secondary data available. Originality/value: The paper discusses a unique perspective on how a pandemic could be misused to strengthen the autocratic rule and make structural changes to a nation, including constitution amendments. The pandemic environment was used to commit economic crime and suppress public opinion projecting the health crisis in the lockdown environment.

  • Editorial
  • Corporate financial crimes in Pakistan – a review and analysis

    Purpose: The purpose of this paper is to highlight those factors which involve elite class criminals in corporate financial crimes. This research implies the fact that the study of criminal behavior is pivotal for finding out the reasons behind such crimes. Design/methodology/approach: By describing theories of criminology, researchers assess the nature of financial criminals in Pakistan from a theoretical perspective. Findings: Elite-class people commit crimes upon perceiving high benefits and less punishment. Moreover, the social environment contributes greatly to inducing criminal behavior. Research limitations/implications: Explanation of criminal behaviors provided in the study will be helpful in providing directions for the prevention of such criminal actions in the future. Originality/value: This research examines the criminal behavior of elite class crimes from the theoretical perspective which will be significant in the prevention of such behaviors.

  • Navigating the US “Green Rush”: anti-money laundering and de-risking implications for banking cannabis-related businesses in Jamaica

    Purpose: This paper aims to illuminate the diverging approaches to marijuana-related drug enforcement at the federal and state levels in the USA, which have facilitated a boom in the US medical cannabis industry (i.e. the “Green Rush”). It further sheds light on how the USA’ aggressive extraterritorial approach to anti-money laundering (AML) enforcement might simultaneously suppress the banking of cannabis-related businesses in Jamaica due to the lingering fear of de-risking. Design/methodology/approach: An international and comparative legal and policy analysis was conducted of the nexus among shifting drug enforcement policies, AML laws and the banking of cannabis-related businesses. Findings: This study found that the constitutional relationship between the US federal government and states has created a de facto comparative advantage for the US medical cannabis-related businesses that benefit from limited access to financial services. This was found to pose far-reaching implications for the banking and development of the Jamaican cannabis sector due to the dependence of the country’s financial institutions on correspondent banking relationships with the US banks that are regulated by federal AML statutes. Originality/value: To the best of the author’s knowledge, this paper is the first of its kind to examine the extraterritorial regulatory risks to the banking of cannabis-related businesses in Jamaica.

  • Days of post-pandemic future: re-imagining corruption practices in a world that won’t stop changing

    Purpose: The purpose of this paper is to propose a new analytical framework in examining corruption from the social ontology perspective by using the Schatzkian practice theory to assess the interconnectedness among social practices constituting the social reality. Design/methodology/approach: This exploratory paper is part of the author’s study to assess the complex corruption phenomenon in Indonesia from multiple perspectives to gain a better understanding of its nature and dynamics. By drawing from the existing literature on the Schatzkian practice theory, the COVID-19 pandemic and the corruption phenomenon, this study investigates the potential changes of the new constellation of practice-arrangement bundles within the social reality and how such changes may alter corruption practices in the future. Furthermore, this study also uses publicly available reports from several national and international agencies to explore possible future scenarios from the interconnectedness of corruption, anti-corruption and pandemic practices. This paper constructs a new analytical framework for assessing the corruption phenomenon and designing the most appropriate anti-corruption strategy from such an exploration. The framework also serves as a reference for future anti-corruption research. Findings: The author establishes that all social phenomena are constructed by an interconnected, dynamic and ever-changing constellation of practice-arrangement bundles within the social reality. As a largely social phenomenon (at least in Indonesia), corruption is also constructed by webs of practice-arrangement bundles. For decades, corruption practices in Indonesia have always been interconnected with anti-corruption practices in ways that changes in one group of practices will drive changes in the others. With the adoption of the pandemic practices centered around social distancing, social restriction and social safety net, corruption practices appear to transform to adapt to the new environment. Therefore, future anti-corruption research should aim to examine the structure and dynamics of corruption, anti-corruption and pandemic practices to highlight changes or potential changes within the three groups of practices to determine the most appropriate intervention measures and anti-corruption strategy. Research limitations/implications: This exploratory study is self-funded and relies primarily on documentary analysis to explore the corruption phenomenon in Indonesia. Future studies will benefit from in-depth interviews with former corruption offenders and corruption investigators. Practical implications: This exploratory paper contributes to developing a sound corruption prevention strategy by proposing a new analytical framework for assessing various social practices, particularly those associated with corruption and the COVID-19 pandemic. Originality/value: This paper highlights the importance of understanding the structure, interconnectedness and dynamics of social practices, particularly associated with the COVID-19 pandemic, to better understand the corruption phenomenon.

  • Fraud schemes during COVID-19: a comparison from FATF countries

    Purpose: This study aims to define fraud crimes, its most prevalent categories and examines the most common of these schemes during the COVID-19 pandemic by drawing on the experiences of several countries and the Financial Action Task Force’s (FATF) updated paper issued during the pandemic. Design/methodology/approach: This study uses a comparative analysis methodology in conjunction with a descriptive analytical approach to compare four FATF member countries in light of the fraud activities that occurred on their territory during the pandemic and their respective law enforcement measures. It makes use of secondary data sources, namely, the theoretical literature on the subject and FATF’s updated paper on money laundering and terrorism financing during COVID-19. Findings: This study found that fraudsters exploited the difficult circumstances during the pandemic in the majority of countries worldwide and identified various fraud schemes based on the incidents reviewed, such as the abuse of economic stimulus in Italy, counterfeiting medical goods in Brazil and investment fraud schemes in California, USA. In Spain, the fraud schemes tended to be cyber related. Such variations were also observed by the law enforcement agencies in the above-mentioned countries. Originality/value: Numerous studies on fraud schemes are available to researchers. However, few such studies have been conducted during the COVID-19 pandemic. Therefore, this study makes a unique contribution to the literature.

  • Fraudulent loans and the United States paycheck protection program

    Purpose: Despite lessons learned from prior disaster relief funding programs, billions of dollars in fraudulent loans were issued by the Paycheck Protection Program (PPP) during the COVID-19 pandemic in the USA. The misuse of funds prevented business owners and their employees who are in true financial need from accessing program funds. The purpose of this paper is to identify techniques perpetrators used to obtain funds from the program illegally since its inception in March 2020 and concludes with suggestions on internal controls to reduce fraud occurrences in future relief packages. Design/methodology/approach: The authors analyze 106 loan fraud cases reported by the US Department of Justice and compiled by the Project on Government Oversight to examine methods individuals used to illegally obtain funds from the program. The authors complement the data with lender characteristics from Call Reports and Business Insights. They further compare the fraud sample to the entire population of PPP loans, which is available on the US Small Business Administration website. The authors report descriptive statistics, correlations and multivariate regressions. Findings: The authors find that most fraud cases falsify tax data to access program loans and inflate payroll numbers to obtain larger loan amounts. Applicants who sought large amounts applied using multiple companies and across multiple lenders, consistent with the use of multiple loans to avoid the scrutiny of a single large loan with a single lender. The authors find that cases with larger amounts relied on less regulated lenders, such as lending companies, rather than more regulated lenders. Originality/value: The PPP is part of the largest ever US stimulus in which the private sector allocated funds. This study provides novel evidence of how fraudsters adapted to the program's rules to defraud the government.

  • The fraud triangle – an alternative approach

    Purpose: In recent years, Public Accountability and Integrity have been matters of growing attention, both in the public and private sector, as citizens demand value for money entrusted to the governments through their taxes. In addition, in many countries, after the recent recession, government budgets and corporate returns have been reduced. Many corporate scandals have occasionally become known and have had a great impact on confidence in the market. Even worse, after the pandemic of COVID-19, «bare and exacerbated massive preexisting problems in the world’s economic, social and security order, threatens to push up to 100 million people into extreme poverty in 2020, struck at a time of dwindling trust in representative governance» (UNDP, 2020). The funds of organizations in the private and public sector have been shrinking, whereas the situational pressures of fraud are increased. In this context, Dorris, President and CEO of the ACFE warns for explosion of fraud in the coming years and reminds that during the 2008 economic, companies cut-off, non-revenue generating activities, such as the internal audit and the compliance departments leaving them exposed to fraud. Therefore, organizations have to do more with less. The purpose of this paper is to present the development of the fraud theory on the management’s perspective aiming to contribute to the efficient development of anti-fraud mechanisms Design/methodology/approach: Having identified the fraud theory developed so far, we provide a framework for the fraud risk management. Findings: This paper incorporates cost/benefits considerations, practical considerations and empirical evidence on fraud. Originality/value: This paper provides valuable information to enable the management, who has the primary responsibility to prevent and detect fraud, to disclaim responsibility by broadening their understanding of fraud theory.

Featured documents

  • A critical analysis of corruption and anti-corruption policies in Italy

    Purpose: This study aims to critically analyse the Law 9 January 2019, n. 3, on “Measures to fight crimes against the public administration and on the transparency of political parties and movements” (so-called bribe-destroyer law). Design/methodology/approach: This paper draws on reports, legal...

  • A Perspective on International Organised and Economic Crime from Interpol

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  • Adopting a risk‐based approach to AMLCTF compliance: the Australian case

    Purpose: The purpose of this paper is to develop a possible method of money laundering and terrorism financing (MLTF) risk assessment in non‐bank entities that are the subject matter of anti‐money laundering and counter terrorism financing (AMLCTF) Tranche II in Australia. Design/methodology/approa...

  • An analysis of the Australian illicit tobacco market

    Purpose: This paper aims to provide an overview of the illicit tobacco market in Australia. It attempts to build a picture of the sources of demand, size of the market and methods of supply. Design/methodology/approach: This paper is based on collation of disparate government reports, industry...

  • Analysis of cyber-crime effects on the banking sector using the balanced score card: a survey of literature

    Purpose: The purpose of this paper is to review the effect of cybercrime in the banking sector. Design/methodology/approach: This study uses a survey of literature and the balanced scorecard (BSC) to analyse the effect of cybercrime on the banking sector. Findings: The literature reviewed...

  • Anti-social financial practices in Nigeria. Significant others perceptions

    Purpose: – The purpose of the paper is to examine the problem of anti-social financial practices which seems to be a taken-for-granted reality in many parts of the world and particularly in developing countries. The paper locates the role of actors within the theory of transformational model of...

  • Art crime and the Wealth of Nations

    Purpose: The purpose of this paper is to discuss art crime including the destruction of historical sites of artistic and architectural value. Design/methodology/approach: The paper is based on two quotations from Adam Smith's Wealth of Nations. Findings: Art crime involves theft by burglary,...

  • Asset recovery and kleptocracy

    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:...

  • Australia: ‘Big Bang’ — The Implications

    The purpose of this paper is to provide some reflections on the Australian experience of ‘Big Bang’ regulatory reform. The analysis is confined to the recent legislation passed on 1st July, 1998 and the reform processes that fuelled these regulatory innovations....

  • Be like water: developing a fluid corruption prevention strategy

    Purpose: Based on the authors’ study, the purpose of this paper is to establish a foundation for assessing and deciding the most feasible corruption prevention activities with significant impact in reducing corruption in the Indonesian public sector. To accomplish this objective, this paper applies ...

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