This article presents fraudulent activity that are done by the unscrupulous desire of people to make the personal benefits by manipulating the tax in taxing system. Taxpayers manipulate the money paid to the tax authorities through avoidance and evasion activities. In this paper, we deal with a specific technique used by the tax-evaders known as a circular trading. We define an algorithm for detection and analysis of circular trade. To detect these circular trade, we have modeled whole system as a directed graph with actors being vertices and the transactions among them as directed edges. We have proposed an algorithm for detecting these circular trade. The commercial tax dataset is given by Telangana, India. This dataset contains the transaction details of participants involved in a known circular trade.
Most of the work on @math are concentrated on stock market trading. In @cite_0 , @cite_5 , @cite_6 , @cite_2 and @cite_14 the authors have investigated on @math and other related collusion techniques used in stock market trading. A brief overview on some of these techniques is given below.
@cite_14 @cite_6 @cite_0 @cite_2 @cite_5
2093131651 2016647770 2011153821 1542569948
Market manipulation remains the biggest concern of investors in today's securities market, despite fast and strict responses from regulators and exchanges to market participants that pursue such practices. The existing methods in the industry for detecting fraudulent activities in securities market rely heavily on a set of rules based on expert knowledge. The securities market has deviated from its traditional form due to new technologies and changing investment strategies in the past few years. The current securities market demands scalable machine learning algorithms supporting identification of market manipulation activities. In this paper we use supervised learning algorithms to identify suspicious transactions in relation to market manipulation in stock market. We use a case study of manipulated stocks during 2003. We adopt CART, conditional inference trees, C5.0, Random Forest, Naive Bayes, Neural Networks, SVM and kNN for classification of manipulated samples. Empirical results show that Naive Bayes outperform other learning methods achieving F 2 measure of 53 (sensitivity and specificity are 89 and 83 respectively). Many mal-practices in stock market trading--e.g., circular trading and price manipulation--use the modus operandi of collusion. Informally, a set of traders is a candidate collusion set when they have "heavy trading" among themselves, as compared to their trading with others. We formalize the problem of detection of collusion sets, if any, in the given trading database. We show that naive approaches are inefficient for real-life situations. We adapt and apply two well-known graph clustering algorithms for this problem. We also propose a new graph clustering algorithm, specifically tailored for detecting collusion sets. A novel feature of our approach is the use of Dempster---Schafer theory of evidence to combine the candidate collusion sets detected by individual algorithms. Treating individual experiments as evidence, this approach allows us to quantify the confidence (or belief) in the candidate collusion sets. We present detailed simulation experiments to demonstrate effectiveness of the proposed algorithms. In financial markets, abnormal trading behaviors pose a serious challenge to market surveillance and risk management. What is worse, there is an increasing emergence of abnormal trading events that some experienced traders constitute a collusive clique and collaborate to manipulate some instruments, thus mislead other investors by applying similar trading behaviors for maximizing their personal benefits. In this paper, a method is proposed to detect the potential collusive cliques involved in an instrument of future markets by first calculating the correlation coefficient between any two eligible unified aggregated time series of signed order volume, and then combining the connected components from multiple sparsified weighted graphs constructed by using the correlation matrices where each correlation coefficient is over a user-specified threshold. Experiments conducted on real order data from the Shanghai Futures Exchange show that the proposed method can effectively detect suspect collusive cliques, which have been verified by financial experts. A tool based on the proposed method has been deployed in the exchange as a pilot application for futures market surveillance and risk management. In this paper, we analyze the trading behavior of users in an experimental stock market with a special emphasis on irregularities within the set of regular trading operations. To this end the market is represented as a graph of traders that are connected by their transactions. Our analysis is executed from two perspectives: On a micro scale view fraudulent transactions between traders are introduced and described in terms of the patterns they typically produce in the market’s graph representation. On a macro scale, we use a spectral clustering method based on the eigensystem of complex Hermitian adjacency matrices to characterize the trading behavior of the traders and thus characterize the market. Thereby, we can show the gap between the formal definition of the market and the actual behavior within the market where deviations from the allowed trading behavior can be made visible. These questions are for instance relevant with respect to the forecast efficiency of experimental stock markets since manipulations tend to decrease the precision of the market’s results. To demonstrate this we show some results of the analysis of a political stock market that was set up for the 2006 state parliament elections in Baden-Wuerttemberg, Germany.