A financial crime diagram, also known as a financial crime flow chart, is a visual representation of the different stages and components involved in a financial crime. It is typically used by law enforcement, financial institutions, and regulatory agencies to understand and track the flow of funds in a financial crime.
The structure of a financial crime diagram can vary depending on the specific crime being depicted but typically includes the following elements:
- The Source of Funds: This is the origin of the funds involved in the financial crime, such as proceeds from illegal activities or stolen funds.
- Placement: This is the initial stage of money laundering, where the illegal funds are introduced into the financial system.
- Layering: This is the stage of money laundering where the funds are moved through a series of transactions to obscure their origin and make them difficult to trace.
- Integration: This is the final stage of money laundering, where the laundered funds are reintroduced into the financial system as legitimate funds.
- Beneficial Owners: This refers to the individuals or organizations that ultimately benefit from the financial crime.
- Financial Institutions: This includes banks, money service businesses, and other financial intermediaries that are used to facilitate the financial crime.
- Regulators: This includes government agencies and regulatory bodies that are responsible for enforcing laws and regulations related to financial crime.
- Law Enforcement: This includes police, FBI, IRS and other agencies that are responsible for investigating and prosecuting financial crime.
The diagram may also include arrows to show the flow of funds and information, as well as additional details such as specific transactions or accounts involved in the financial crime. Some diagrams may also include regulatory and compliance controls that are in place to prevent and detect financial crime.
This page was last updated on January 16, 2023.