Financial crime is omnipresent and has diverse faces, from falsely impersonating personalities like Daniel O’Donnell to extort money, to more perilous fraudulent schemes orchestrated by criminal cohorts engaged in money laundering. The Irish market bears a heavy annual loss of hundreds of millions of euros, adversely impacting each citizen through escalated taxes and a rise in prices of goods and services.
“Plainly stated, financial crime is an umbrella term encompassing a broad stretch of illegal acts intended for economic benefit,” elucidates Colm O’Flaherty from Deloitte Financial Crime Advisory team. It not only includes prominent examples like theft, fraud or illicit drug trade, but also encompasses niche cases like bribery, corruption, and the horrifying profiteering from human trafficking or child exploitation.
O’Flaherty further explains that the scope of financial crimes also extends to unique categories involving financial sanctions levied by administrative bodies and financial strategies exploited by terrorists to facilitate their plans.
In the words of Katherine Gillespie, the managing director and the head of the Forensic team at KPMG, financial crime presents itself in numerous guises, influencing both organisations and individuals alike. She conveys that commonplace digital tools and applications that we often rely on are yet to find a regular place in healthcare environments.
Pointing out from an individual’s vantage point, Gillespie remarks, “The most noticeable faces of financial crime commonly include online fraud, extortion via fake payment-card, telephonic fraud, and fraudulent investment schemes.” Unfortunately, it’s becoming increasingly frequent to encounter incidents where acquaintances have been tricked into making bank transactions or substantial investments by a growing variety of persuasively crafted criminal plots and online scams.
Gillespie further adds that particular forms of financial crimes that are mostly business-oriented can adversely affect individuals as well, and thereby cast a negative shadow on our societies.
“Such financial misdemeanor involves money laundering, sleaze, bribery, insider trading illicitities, tax dodging, fabrication of financial statements, manipulation of assets and peculation.”
Technological advancements have proven to be a boon for criminals, exemplified by the Daniel O’Donnell con. Software capable of mimicking voices and generating fake images is being deployed to cheat unsuspecting victims.
Referring to such cases, O’Flaherty warns, “Such deceptive scam can be executed under the disguise of any person you hold in trust – mother, brother, an office colleague, essentially anyone – the duplicated voices and images are incredibly deceptive.”
Ireland is witnessing an increase in money mule activities, with the sum of cash funnelled through mule accounts, used by typically innocent parties to clean dirty money, believed to have grown to €17.5m in the initial half of 2023; a projection by Deloitte. Young individuals and students are primary targets for these money laundering rings who persuade them to turn their accounts into vehicles for laundering money by offering small sums.
Financial crimes expert, O’Flaherty, warns that individuals could face severe repercussions for giving financial criminals access to their accounts. Whilst it may not seem as a substantial issue to them, they may find themselves unable to receive a US visa. O’Flaherty firmly posits that everyone must understand the gravity of these actions.
Those who fall victim to these crimes often suffer significantly. Gillespie, another financial expert, elucidates that individuals often lose their hard-earned savings – from deposits for homes, retirement funds and even emergency savings. This leaves victims considerably vulnerable, and it erodes their trust in others.
Gillespie also sheds light on how this phenomenon deeply affects communities. Not only does it facilitate and perpetuate other crimes, but resources and public funds are redirected from beneficial activities into combating financial crimes. Gillespie underlines the fact that, due to its transnational nature, investigating and prosecuting instances of financial crime is a complex task, with many offenders going unpunished.
The initial line of defence against such crimes lies with the individual, says O’Flaherty. He urges all to understand the potential dangers of technology used in committing crimes. If someone approaches individuals online or via phone requesting money, or offering it, he urges the conversation to be halted. If any worries or concerns occur, O’Flaherty advises to use the number on their bank card to seek advice.
Additionally, he highlights a weakness in our holistic protection. “The inability of our banks to communicate regarding financial felonies is a significant issue,” he expresses. “Our current system lacks a method for exchanging relevant information, leaving us vulnerable to fraudulent individuals. If they’re thwarted by one outlet, they can easily relocate and establish an account elsewhere.
Sharing information is critical in these circumstances. With Ireland serving as the corporate headquarters of all substantial tech and social media companies, we’re in a unique position. By encouraging financial institutions and other bodies to cooperatively share information and intelligence, we can form a united front against financial wrongdoings.”
While the occurrence of financial crime is likely to persist, a shift in perceptions could result in reduced activity rates.
“It’s inevitable that there will always be those who seek to manipulate others for personal profit, and we won’t be able to completely eliminate financial crime.” Giles commentates. “Moreover, there will always be individuals who, feeling cornered, could potentially act inconsistently with their character.”
Giles conveys her belief that improved education is a crucial stepping stone in reducing financial crime and altering the mindset of those who consider it a victimless crime.
“Perhaps acquainting the public with the costs and consequences of financial crime and enhancing public understanding could foster alertness and a no-tolerance policy towards all forms of financial crime in our society,” she concludes.