Money laundering is a major global problem, enabling criminal organisations to hide their ill-gotten gains and to finance further operations. Prevention of money laundering is seen as a high priority by many governments, however detection of money laundering without prior knowledge of predicate crimes remains a significant challenge. Previous detection systems have tended to focus on individuals, considering transaction histories and applying anomaly detection to identify suspicious behaviour. However, money laundering involves groups of collaborating individuals, and evidence of money laundering may only be apparent when the collective behaviour of these groups is considered. In this paper we describe a detection system that is capable of analysing group behaviour, using a combination of network analysis and supervised learning. This system is designed for real-world application and operates on networks consisting of millions of interacting parties. Evaluation of the system using real-world data indicates that suspicious activity is successfully detected. Importantly, the system exhibits a low rate of false positives, and is therefore suitable for use in a live intelligence environment.
One of the earliest systems for detection of money laundering is that described by Senator @cite_11 , which applied rule-based evaluation to identify suspicious parties. The rules used by this system were derived from expert knowledge and encoded in an evaluation module that was run each time the target database was updated. Parties matching these rules would then be further investigated by analysts using an interactive query interface and a variety of visualisation tools provided by the system. More recently, describe an alternative rules-based system, where rules are encoded using a decision tree @cite_9 .
@cite_9 @cite_11
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Money laundering (ML) involves moving illicit funds, which may be linked to drug trafficking or organized crime, through a series of transactions or accounts to disguise origin or ownership. China is facing severe challenge on money laundering with an estimated 200 billion RMB laundered annually. Decision tree method is used in this paper to create the determination rules of the money laundering risk by customer profiles of a commercial bank in China. A sample of twenty-eight customers with four attributes is used to induced and validate a decision tree method. The result indicates the effectiveness of decision tree in generating AML rules from companies' customer profiles. The anti-money laundering system in small and middle commerical bank in China is highly needed. The Financial Crimes Enforcement Network (FIN-CEN) AI system (FAIS) links and evaluates reports of large cash transactions to identify potential money laundering. The objective of FAIS is to discover previously unknown, potentially high-value leads for possible investigation. FAIS integrates intelligent human and software agents in a cooperative discovery task on a very large data space. It is a complex system incorporating several aspects of AI technology, including rule-based reasoning and a blackboard. FAIS consists of an underlying database (that functions as a black-board), a graphic user interface, and several preprocessing and analysis modules. FAIS has been in operation at FINCEN since March 1993; a dedicated group of analysts process approximately 200,000 transactions a week, during which time over 400 investigative support reports corresponding to over $1 billion in potential laundered funds were developed. FAIS's unique analytic power arises primarily from a change in view of the underlying data from a transaction-oriented perspective to a subject-oriented (that is, person or organization) perspective.