Improving control over illicit money flows and recovering the proceeds of crime
Research by Professor Mike Levi provides one of the first rigorous empirical analyses of the scale of financial crime.
In recent decades the image of criminals living luxuriously without any visible means of legitimate support has been both a negative role model for communities and an indication of deterrence and prevention failures.
Since the 1980s, there has been a wave of global activity seeking improved control of money laundering and confiscation of crime proceeds.
This set of research studies, based around the work of Professor Mike Levi, has developed ways of measuring the scale of illicit money flows to help agencies tackle financial crime.
Measuring ill-gotten gains
Professor Levi's research used a combination of ethnography, interviews and statistical analysis to provide one of the first large-scale analyses of the scale of financial crimes. It also explored how business, regulatory and criminal justice controls actually operate against transnational crimes, for example showing that verified frauds cost the UK at least £11.9 billion in 2005.
The studies highlighted the lack of evidence that money laundering controls have led to less crime or altered criminal careers. The research indicated that whilst shaming and informal settlement may be appropriate for tax offenders, they have no measured effect on sociopathic loners or professional criminal networks.
Early examples of Levi's work revealed:
- how bankers and others identified (or not) 'suspicious transactions' by their customers and filtered these suspicions to the Financial Intelligence Unit
- how the police and courts investigated (or not) proceeds of crime
- how prosecutors and defence counsel dealt with these issues in court
- deficiencies in the follow up of confiscation orders, illuminating the limits of enforcement in ways still valid today.
This work included the first (and still almost the only) study of the policing 'yield' of money laundering controls, constructively challenging and refining standard senior police and political assertions about their effectiveness.
Mike Levi has been Professor of Criminology in the School of Social Sciences since 1991.
In May 2014 he was awarded the Sellin-Glueck award in Criminology, the highest award given by the American Society of Criminology to scholars from outside the UK.
The studies have informed and helped to shape the fraud, money laundering and organised crime strategies of the UK Home Office, UK enforcement agencies, and international bodies such as the EC Justice and Home Affairs and IMF post-2008.
At the national UK level the impact of Levi's work has included:
- helping the Financial Services Authority develop a strategic view of the harms (scale and impact) of a broader range of financial crimes
- stimulating those developing the Serious and Organised Crime Agency to focus on harm reduction rather than conventional law enforcement outputs
- adapting an e-crimes harm framework for the Police eCrime Unit of the Metropolitan Police, which they use for their annual reporting. As a result, the Unit was able to put together a business case which subsequently secured £30m treasury funding over a four year period
In terms of international policy making, Levi's analysis of e-gambling and money laundering provided the evidential basis for the Council of Europe's Moneyval committee to conduct a money-laundering exercise on that subject, to which he was adviser. It was also used and cited explicitly in the German government's revision of its money laundering legislation in 2013 to include online gambling.
Professor Levi was also part of a team asked by the UK Ministry of Defence to do a critical overview of evidence on the costs of cybercrime. This work has been submitted to the European Parliament (at their request) and was cited in the World Economic Forum Global Agenda Council on Organized Crime's 2012 report on organized crime enablers.
- Levi, M. 2012. How well do anti-money laundering controls work in developing countries?. In: Reuter, P. ed. Draining Development?: Controlling Flows of Illicit Funds From Developing Countries. Washington, DC: World Bank. , pp.373-414.
- Levi, M. 2010. E-gaming and money laundering risks: a European overview. ERA Forum 10 (4), pp.533-546. (10.1007/s12027-009-0143-2)
- Levi, M. et al. 2007. The nature, extent and economic impact of fraud in the UK. Technical Report.
- Middleton, D. J. and Levi, M. 2005. The role of solicitors in facilitating 'Organized Crime': Situational crime opportunities and their regulation. Crime, Law and Social Change 42 (2-3), pp.123-161. (10.1007/s10611-005-5655-2)
- Levi, M. and Maguire, E. M. W. 2004. Reducing and Preventing Organised Crime: An Evidence-Based Critique. Crime, Law and Social Change 41 (5), pp.397-469. (10.1023/B:CRIS.0000039600.88691.af)
- Levi, M. 1997. Evaluating the 'new policing': Attacking the money trail of organized crime. Australian & New Zealand Journal of Criminology 30 (1), pp.1-25. (10.1177/000486589703000101)