Referenced in our Newsletter Volume 2, Issue 5 - May 2003
Detecting Financial Crimes
As the techniques associated with detecting financial crimes are improved, money launderers, drug dealers, terrorists, crime organizations, and other financially motivated ventures associated to illicit activities will become more difficult to conduct. Better collection, detection, analysis, and collaboration systems are being put into place to ensure that the profits associated with these endeavors are disrupted through seizures and that the organizations/people are prosecuted for their illegal behaviors.
As many of us know, there are large volumes of drug transactions and alien smuggling activities in the United States that can yield incredible profits. In the struggle to ensure the safety of our borders and our financial systems, the State of Arizona supports one of the most progressive FRU (Financial Remedies Unit) to proactively pursue and uphold financial crimes enforcement. Through innovative legislation, Arizona provides effective remedies for anyone moving money based on ill-gotten gains. Outstanding subpoenas and state laws generate a considerable amount of data relating to various financial transactions occurring in or out of the state. From this data, there are two very distinct patterns associated with drug dealing and alien smuggling.
Alien smugglers call themselves "coyotes" because they can quietly slip through the desert, cross borders, and quickly move between different locations. They are contracted and paid for by family members of the alien(s), businesses in need of cheap labor, or the aliens themselves. They are brokered just like any other commodity often using central
collection locations and the entire operation is tiered (hierarchical). Often the money and the products (e.g., the aliens) move between different levels representing the different middlemen associated with this process. Money is usually transferred using money remitters, money orders, or money transfer locations.
This operating structure provides a unique pattern since most of the recipients of the "product" are outside of Arizona and all the money flows inbound into the State. Therefore, as shown in the first diagram, the coyotes are often depicted as the hub of a spoke of transactions. The figure below represents how a typical "coyote" financial pattern appears where each "SUBJECT" represents a unique transactor within the network (and each linkage represents a transaction between the two parties). In this example, there are actually two coyotes with an indirect set of third-party connections between them. The analysts can quickly find these patterns using VisuaLinks and create affidavits in support of court-ordered seizure warrants to seize the transactions.
The drug-dealer patterns are similar in that they often deal with the same pick-up operators. However, the flow of the monies comes from small sets of drug distributors, each making repeated sending transactions, rather than from large numbers of one-time senders. Although these drug dealers may use slightly differing identification in different transactions to defeat reporting requirements, VisuaLinks analysis can often detect this pattern. The second diagram shows a more concentrated network and the link-thickness reflects the number of transactions along with the dollar amount. In this diagram it is obvious that many more transactions occur between single entities when pursuing drug dealers than with the coyote pattern.
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