Including digital currencies and money transfer applications .. How is financial crimes being implemented through modern technology?

Technological innovations have led to the emergence of new types of financial crime via emails and social media, and have enabled criminals to defraud victims regardless of their geographical location.

According to the US site "Worldview Stratfor", money launderers take advantage of money transfer applications, encrypted communication platforms and digital currencies to hide and transfer illegal funds.

Criminals take advantage of these digital tools because they are convenient, low-cost, and widespread around the world, and money laundering networks benefit from the high degree of confidentiality that these platforms provide, which supports fraud and denial methods in cases of legal accountability.

But modern technologies - depending on the site - may also impede the work of criminals, as the reliance on private companies for communications and money transfer means that investigators can access records and data through judicial orders.

Blockchain-based cryptocurrencies such as Bitcoin are also subject to scrutiny.

The preservation of activities and information on personal electronic devices helps investigators gain access to valuable evidence and information that can be used to detect major fraud operations by simply hijacking a smartphone, tablet or laptop.

Money transfer platforms between individuals are among the most prominent tools used to catch victims and steal assets (Getty Images)

Money transfer platforms

Money transfer platforms between individuals are among the most prominent tools used in catching victims and stealing assets, and they have gained more popularity and spread during the Corona pandemic, and it is likely that the matter will continue after the end of the health crisis.

These platforms help criminals camouflage, complicating investigators' efforts because they can move funds across multiple accounts and obscure their final destination.

For example - says the World View Stratfor report - an indictment was issued in April 2021 against a drug trafficker in Detroit for using the platforms "Zelle" and "Venmo" to transfer and hide illegal money.

Criminals can also, through the encrypted communication services provided by WhatsApp, Telegram and other applications, communicate with each other and coordinate their illegal activities.

According to World View Stratfor, in August 2020, US law enforcement agencies intercepted a money laundering operation supervised by members of Al Qaeda, and they used WhatsApp and requested donations in the form of Bitcoin purchases to support armed groups in Syria.

In March 2021, a federal jury approved an indictment against the chief executive of Sky Global, a Canadian-based company, in which investigators accuse the company of providing encrypted electronic devices specifically designed for financial fraud and lawlessness.

The indictment alleges that Sky Global has facilitated criminal networks to distribute drugs in several countries of the world and money laundering operations.

The company allegedly provided services including remote deletion technology for communications or files that could be used as evidence of illegal activities.

Criminals are likely to mix modern and ancient methods to bolster their activities and evade authorities (Getty Images)

Bitcoin

According to the site, cryptocurrencies such as Bitcoin help hide the identity of financial assets, and make them easily transferable around the world, which increased the volume of money laundered globally through Bitcoin trafficking from about one billion dollars in 2018 to 2.8 billion dollars in 2019, according to For Chainanalysis.

Cryptocurrency is one of the most prominent means used by criminals in transferring money and camouflaging operations, but it contains loopholes that help reveal these crimes.

In a report, Chen Analysys asserts that 55% of criminal activity in the cryptocurrency field is concentrated in a small group of 270 blockchain addresses, which means that investigators can disrupt most illegal operations by focusing on only a small group of accounts.

With networks promoting drugs and other illicit products increasingly dependent on cryptocurrencies, law enforcement authorities continue to crack down on these networks and scrutinize exchanges for illegal activities.

In January 2021 - according to the World View Stratfor Report - a California man admitted to exchanging the equivalent of $ 13 million in bitcoin without recording his financial activities.

He was arrested after agreeing to facilitate the sale of Bitcoin coins equivalent to more than $ 80,000 in cash for an officer who claimed to be a member of an international drug smuggling network.

In light of the risks associated with illicit financial operations via the Internet, it is certain - according to the site - that criminals will not in the near future abandon traditional methods of money laundering, but rather they will work to mix modern and old methods to enhance their activities and evade law enforcement authorities.

This could be done by reducing the costs of establishing "front companies" by transferring them to the virtual world, using money transfer applications to promote money laundering operations based on commercial exchanges, or increasing the opacity and camouflage in cryptocurrency purchases.

80% of criminal networks in European Union countries use legal commercial cover to carry out their illegal activities (Getty Images)

Threats and risks to commercial enterprises

As strict measures in the financial sector make it more difficult to launder money through traditional banking institutions, criminals resort to targeting companies in other sectors.

According to Fenergo, the US authorities imposed fines on companies amounting to $ 10.4 billion in 2020 for various violations, compared to $ 8.14 billion in 2019.

Understanding the mechanisms of money laundering and the various methods used in these activities will help companies and institutions that operate legally to avoid the risks associated with these illegal operations.

Criminals constantly rely on the formal economy to fraudulently receive government loans, impersonate legitimate companies, or sell products purchased with illicit money at legal outlets.

A recent assessment of the threats of organized crime in the European Union indicated that 80% of the criminal networks in the European Union countries use legal commercial cover to carry out their illegal activities, including money laundering.

Business-based money laundering - specifically, illicit money laundering operations through the purchase of legitimate goods - can lead to the mixing of funds and expose many entrepreneurs and companies to legal accountability.