Brattle principals Paul Hinton and Mark Sarro, associate Rand Ghayad, and Kevin Rosenberg of Lowenstein & Weatherwax recently co-authored an article on Law360, “Big Data’s Big Impact In Financial Investigations,” which describes the challenges in detecting trade-based money laundering (TBML) for financial institutions, other businesses, and law enforcement.
The authors describe the various schemes used by criminal and terrorist organizations and money launderers (such as mis-invoicing and multiple invoicing), and how difficult it can be to detect TBML with the ever-growing magnitude of global trade and free trade zones, in addition to other detection obstacles.
However, big data analysis can be an effective tool to combat TBML and other illegal financial activity by increasing the efficiency and power of investigations of financial flows to reveal illicit transactions. Big data mining, followed by the application of statistical techniques, can be used to identify patterns potentially indicative of TBML that would otherwise be hidden or difficult to detect. Whether they are used for internal investigations or for preventative or monitoring purposes, the authors argue that big data analytics and data science have wide applications to enhance anti-money laundering practices.
The full Law360 article can be downloaded below.