Journal of Financial Crime

Human trafficking and forced labour: A criticism of the International Labour Organisation : Table of Contents

Kadriye Bakirci — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – During the last ten years, the International Labour Organisation (ILO), and some other international organizations, have increasingly addressed human trafficking from a “forced labour” perspective. The purpose of this paper is to clarify the terminology in relation to human trafficking and forced labour, to highlight the links between them, and to provide a critique of the ILO approach. It also aims to make the case for the implementation of a specific international instrument to address the link between trafficking and forced labour. Design/methodology/approach – This paper compares the definitions of human trafficking and forced labour, the link between them in the United Nations, European and ILO instruments. Findings – Although human trafficking is a criminal activity, the ILO identifies it as a form of forced labour. The paper concludes that, no matter what role the trafficking victims have in participating in the criminal activities, they should be viewed as victims and witnesses. They should not be viewed as “workers” or “labourers”. Any minor under the age of 18 years, in accordance with the European and international instruments, has no legal capacity to give consent to being exploited. Originality/value – This paper argues that the international and European instruments do not specifically address the link between trafficking and forced labour. There is a need for a specific international instrument prescribing the link between trafficking and forced labour. In the absence of such an international instrument, there is a piece meal approach by international bodies and countries toward the regulation of trafficking and forced labour.

Financial services in trouble: the electronic dimension : Table of Contents

Michel Picard — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The initial role of computers and information technology (IT) systems consisted of improving business daily's operation. However, this quest of efficiency serves more obscure goals as fraudsters exploit the electronic dimension for personal profits with a maximum devastating impact on businesses and their client. The purpose of this paper is to suggest an analysis of the role of the electronic dimension in financial market crimes. It proposes reconsidering its importance based on its role rather than on its complexity and, consequently, better understanding the basic elements of a fraud. Design/methodology/approach – The paper takes the form of a case analysis and field work. Findings – The complexity of an IT system facilitates the commitment of a fraud and, at the same time, complicates its investigation. However, an IT system does not initiate a fraud. It is an accessory, a tool at the service of a criminal mind which is where the scheme originates. Research limitations/implications – Information regarding the two case studies comes only from public sources (mainly written media and books) and is not confirmed by any confidential data available to the author. Originality/value – Many computer crime experts (re: Cybercriminality Conference in Canada, April 2008, and in Luxembourg, June 2008) agree upon accessorial aspect of IT systems. For investigation purposes, it switches the focus from the computer element back to the main event: the environment in which the fraud occurs.

White collar crime and the criminal justice system: Government response to bank fraud and corruption in China : Table of Contents

Hongming Cheng, Ling Ma — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The purpose of this paper is to assess the government efforts in criminalising and combating bank fraud and corruption in China and their policy implications. Design/methodology/approach – An integrated method is used to gather the data for this study, including government documents, statutes, congressional reports, legal cases, news reports, online survey and interviews with key policy-makers, investigators and prosecutors. Findings – This research finds that a major problem of bank fraud and corruption in China is the gigantic web of government officials, bank insiders and criminal businesses in committing fraud. The harshness of the Chinese law has not automatically resulted in making the struggle against bank fraud more effective. Law, enforcement and punishment are not certain, predictable, and applied consistently in order to deter fraud. Political, ideological and legal differences have hindered China's pursuit of escaped criminals in foreign countries. Practical implications – This paper indicates that a three-pronged approach – deterrence, prevention and education – is needed to address bank fraud and corruption. The industry's preventive efforts are of far greater importance than any extreme penalty. There is a need for a reconstruction of business ethics to ensure willing compliance with the law by individuals and organizations. Originality/value – The paper is of value to law enforcement policy-makers, banking regulators, financial institutions and academic researchers with interests in bank fraud and corruption issues.

PEEPing at PEPs : Table of Contents

George Gilligan — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The purpose of this paper is to discuss the subject of politically exposed persons (PEPs) and some of the major issues associated with them. PEPs as a specific category are receiving increased attention from governments, law enforcement agencies and international organisations such as the Financial Action Task Force. An increased academic and theoretical focus upon PEPs is required because there is considerable uncertainty about the specific definition of PEPs, how precisely they may be categorised, what the impacts of their activities are and how they might be countered. Design/methodology/approach – This paper first discusses some of the ambiguities surrounding the definition of PEPs. The paper then emphasises the unsurprising reality that definitional confusion regarding PEPs contributes to uncertainty about their incidence and effects. The paper then highlights some of the key policy challenges in responding to PEPs and provides examples of good and bad practice in seeking to counter the activities of PEPs. Findings – The paper concludes that it is important for governments and business organisations to be proactive about emerging risks relating to PEPs. However, experience suggests that it seems extremely difficult to segregate political contexts from how the harms and other problems associated with PEPs might be countered and that political expediency may be a defining overall factor in how responses to PEPs evolve. Originality/value – The paper's originality and value lies in its efforts to link the definitional and political landscape surrounding the issue of PEPs, and to articulate that progress in the former is unlikely without open appraisal of the impacts of the latter.

Coming to America: the extraterritorial reach of US judicial process : Table of Contents

Frank P. Cihlar — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The purpose of this paper is to explore situations in which US Federal Courts may impose severe fines and sanctions to compel the disclosure of information maintained outside the territorial limits of the USA by enforcing either a grand jury subpoena or an Internal Revenue Service administrative summons. Design/methodology/approach – The paper presents a memorandum of law summarizing and analyzing relevant US legal precedents, including In Re Grand Jury Proceedings (Bank of Nova Scotia), 740 F.2d 817 (11th Cir. 1984), a case that has come to be eponymous for any US judicial process calling for the production of foreign records: “Bank of Nova Scotia subpoenas.” Findings – The paper finds that, in appropriate circumstances, US Federal Courts have been willing to impose coercive fines and sanctions on individuals or entities that have failed to produce records and other information that is outside the territorial jurisdiction of the USA. Research limitations/implications – The analysis is focused on two US legal precedents that exemplify the factors considered by US Federal Courts in arriving at a decision. Many other cases are cited but not examined in depth. Practical implications – The paper is of interest to anyone engaging in cross-border activities with the USA, particularly multi-national financial organizations. Originality/value – The paper provides an insight into the US law enforcement tools that may be deployed against multi-national organizations.

Why civil actions against corruption? : Table of Contents

Simon N.M. Young — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The purpose of this paper is to identify and examine motivating factors for why public and private actors initiate costly and risky civil actions to recover loss due to corruption in an era of increasing multilateral consensus and cooperation against corruption and organised crime. Design/methodology/approach – Research into recent global trends and types of civil lawsuits against corruption is conducted. Several cases, particularly from Canada, Hong Kong, the USA and the UK, are used to illustrate the attractions and difficulties of civil litigation. The implications of the recent international treaties on corruption are analyzed. Qualitative findings are made on a range of motivational factors that lie behind different types of civil actions against corruption. Findings – The paper notes an apparent rise in interest in civil actions against corruption and describes five types of actions brought by governments and companies. Civil actions are indicative of the want of better alternatives to recovery. While recent anti-corruption treaties help to remove barriers to civil actions, the treaties themselves cannot explain the increased interest in civil lawsuits. Full explanation lies in the empowering effect of suing, the political significance of these lawsuits particularly for a new regime suing to recover plundered property from the old regime, and the ease by which a lawsuit can be launched. Originality/value – This paper contributes to the literature in identifying types of civil actions against corruption, the practical and political motivations behind civil actions, and the positive relationship between international cooperation regimes and civil actions.

Fraudulent money transfers: a case from Turkey : Table of Contents

Cenap Ilter — Sun May 17 14:15:04 BST 2009

Abstract:
Purpose – The purpose of this paper is to show to the public in general and auditors in particular that the money deposited to the banks that operate in an uncontrolled medium can be misused by owners of the banks. Design/methodology/approach – The paper has been designed based on a fraud theory. The theory has been developed on financial analysis and audit tests. The theory then revised and the existence of a bogus company and its intermediary role in the fraud scheme has been proven. Findings – The paper explores that banks controlled by unreliable owners can lead to misuse of public's funds in accordance with the directives of the owner. Public's money can be transferred to other group companies in an illegal manner-in excessive amounts and never returned to the bank by means of applying different accounting techniques. Practical implications – Auditors, who may audit group companies that include a bank or banks with deposit receiving and lending rights should pay attention to the transactions between the group's bank and the other group companies. The lending may be excessive in amount and/or never paid back and various accounting malpractices may exist. Originality/value – The case that the paper covers reflects the author's own audit experiences. The names of the companies have been changed but not the essence of the events. From this perspective it sheds light onto the path of an auditor who happens to be in a similar situation.