Financial Networks and Structure of Global Financial Crime

Abstract

Financial crimes are social problems that affect many different communities around the world, involving public and private organizations in diverse sectors and activities. We analyze global financial networks focusing on particular aspects of their characteristics when suspicious activities of tax fraud, corruption, and money laundering could be identified. This research provides a perspective on the presence of financial crime phenomena in global financial networks through the study of their large-scale structure. Our results reveal that suspicious activities run in small groups, and they emerge around communities of financial intermediaries, non-financial intermediaries, and offshore entities. Moreover, we find preliminary indications that these activities can play a role in deviating the degree distributions of these networks from a power-law behavior. We also discuss the temporal evolution of the networks and its significance in the identification of suspicious activities and financial crime.