Work detail

Money Laundering and Suspicious Activity Reporting in the United States

Author: Bc. Ivana Krouparová
Year: 2021 - summer
Leaders: doc. Petr Janský Ph.D.
Consultants:
Work type: Bachelors
Language: English
Pages: 54
Awards and prizes:
Link: https://dspace.cuni.cz/handle/20.500.11956/147904
Abstract: Money laundering is a seriously understudied phenomenon and despite the
continuous advancement of detecting technology, continues to be a serious issue
today. This thesis provides a detailed definition of money laundering, lists some
of the most common examples of how this illegal activity can be carried out in
practice, and provides a brief historical overview of the U.S. efforts to combat
it. The next segments follow up on previous research in order to evaluate
the effectiveness of the U.S. suspicious activity reporting (SAR) system. The
paper investigates whether an elevated prevalence of certain offenses, such as
financial crime or drug trafficking, could explain the growing number of SARs
or if the upward trend could be in part explained by institutions over-reporting
in fear of the penalties set by the local regime. The estimates obtained by
applying the random effects model on a panel of 51 U.S. states, including the
District of Columbia, did not indicate a presence of excessive over-reporting.
Instead, the regression results showed a negative correlation between the SAR
filing rate and the prevalence of financial crime in the state. A conclusion is
drawn that the increasing number of SARs cannot be viewed as a result of more
financial crime, implying that systematic under-reporting may be present and
thus, putting the effectiveness of the framework in question
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