This article will address the money laundering statistics in 2023 you need to be more enlightened about this problem.
You would think that after all these years, and the advancements of technology that there would be more ways to put a stop to it, or at least better ways to uncover it.
In the United States, money laundering is illegal, yet it is still a massive problem.
However, statistics on money laundering will show that this issue isn’t exclusive to the United States. It’s also a global issue, which you will soon learn.
Key Money Laundering Statistics 2023
- The United States was the first country to introduce legislation against money laundering.
- United States money laundering accounts for 15% to 38% of all money laundering worldwide.
- The United Nations estimates around $800 billion to $2 trillion, is laundered each year across the world.
- Identity theft is now one of the top trends in money laundering.
- In 2019, regulators hit banks up for a record-breaking $10 billion in fines.
- Cryptocurrency is now being used in money laundering.
- 90% of money laundering crimes are never detected.
- By 2023, the anti-money laundering software sector could reach $1.77 billion.
- In 2020, United States law enforcement officials took action against roughly 2,300 money mules in a global money laundering crackdown.
- In 2019, Florida was at the top of the list for the most money laundering offenders.
Detailed Money Laundering Statistics 2023
We will use this article section to discuss general money laundering statistics to introduce you to its history, evolution, and factors that have been put in place to stop it.
Let’s look into these stats and facts.
1. The United States Was the First Country to Introduce Legislation Against Money Laundering.
The year was 1970. The United States was among the first nations to enact AML, anti-money laundering legislation to combat this kind of crime.
Over the years, money laundering has evolved, but so has U.S. legislation on the crime.
The term “money laundering” was born out of prostitution and illegal liquor sales in Al Capone’s days.
Organized crime leaders would literally chain their illegal monetary gains through laundromats. So, the term was born.
2. Money Laundering Happens in Three Phases.
Money laundering is the act of taking illegally generated money (dirty money) and making it seem like it was legally acquired.
That’s how these criminals can spend it. Some activities where money laundering occurs include drug trafficking, financial crimes, and other illegal endeavors.
There are three phases in the money laundering process:
- Placement, where the funds are transferred to a legit financial system or businesses, like those that take in small amounts of cash.
- Layering, where the illegal funds are hidden by bookkeeping or through transactions. Dirty funds are run through a small business, like a grocery store to create “clean cash” that can be deposited into a legitimate financial account, like a bank account.
- Integration, where the “laundered” money can be withdrawn and used as legal money.
3. Identity Theft Is Now One of The Top Trends in Money Laundering.
One of the elements of money laundering is to hide one’s identity to avoid getting caught.
The natural course of action would be to steal others’ identities to hide them from the authorities.
In this instance, these criminals are committing another crime to hide their primary crime.
Therefore, a rise in identity theft has been found among money laundering crimes.
Identity theft that is occurring in money laundering schemes can be seen by the example of the Netflix show, Ozark.
The very purpose of money laundering is to get away with illegal activities by covering up with more crimes.
By the way, resolving this problem is the most difficult of all identity theft crimes due to the complexity of the crime.
4. In 2019, Regulators Hit Banks up For a Record-Breaking $10 Billion in Fines for Money Laundering.
What happened here?
Well, regulators discovered that some banks were violating the nation’s anti-money laundering regulations, which accounted for 60.5% of the fines.
The rest of the fines came from transactions with other nations that are under sanctions.
Between 2008 and 2018, a total of $26 billion in fines were levied by regulators for the same violations, and for other illegal financial transactions.
It’s been estimated that 60% of these fines came from criminals who outwit the screening systems of the banks.
5. Cryptocurrency Is Now Being Used in Money Laundering.
As we already discussed, as technology evolves, do money laundering techniques.
So, it makes sense that money laundering schemes would start including cryptocurrency in the process.
In 2021, criminals laundered £6.4 billion ($8.6 billion USD) of cryptocurrency.
According to Chainalysis (a blockchain data company), this figure represents a 30% rise from 2020.
The NCA, the UK’s National Crime Agency, has reported that law enforcement has responded.
Chainalysis can and does track the flow of illegal activities in the crypto world.
6. 90% of Money Laundering Crimes Are Never Detected, Though 91.1% of Money Laundering Criminals Are Imprisoned.
Even though a 91.1% imprisonment rate is considered high, it doesn’t account for the number of money laundering incidents that go undetected.
Undetected money laundering crimes account for 90% of this criminal activity.
In 2019, only 990 instances were detected, and the perpetrators were imprisoned, but most money laundering incidents were never discovered.
Those who do get caught and imprisoned serve an average of 70 months in prison
7. By 2023, the Anti-Money Laundering Software Sector Could Reach $1.77 Billion.
To find better ways to detect and alleviate money laundering crimes, the anti-money laundering market is in the game.
As technology develops and money laundering evolves, there needs to be more safeguards and effective software ready to quickly detect it.
This part of the software industry is projected to reach $1.77 billion by 2023. The rise in this software has been happening since 2016 and 2017.
The value of such software was valued at $690 million and $868 million, respectively, in those years.
U.S. Money Laundering Statistics
Now that you have a few statistics, history, and facts, we will use this section to discuss specific United States money laundering stats.
This data will include facts related to the costs incurred by money laundering, where money laundering is the highest in the states, and other interesting, if not shocking statistics.
8. 79.1% of United States Money Laundering Offenses Were Committed by Men.
Also, the average age of money laundering offenders was 41 years old in 2019.
Of all global offenders, 72.4% were U.S. citizens. Besides 79.1% of money laundering offenders being men, 33.4% were white, 39.5% were Hispanic, 19.6% were black, and 7.5% were of other races.
Though money laundering offenses have dropped by 13% since 2018, 2020 witnessed a rise in fines that account for five times higher than they were in 2019.
So, while criminal offenses seem to have decreased, the amount of fines increased. Maybe that’s due to inflation.
9. In 2020, United States Law Enforcement Officials Took Action Against Roughly 2,300 Money Mules in A Global Money Laundering Crackdown.
Obviously, this was not a small crackdown. Statistics show that 2,300 money mules were apprehended in 2020.
It seems that many of these money mules are victims of fraud by money laundering offenders. In 2019, there were 600 fewer money mules apprehended.
Many of these scams are perpetrated on the nation’s older or susceptible members of a community.
Even though it’s unknowingly and unintentional, money mules drive this kind of fraud in the United States.
If you have family or friends who are over 60 and you think they may have been a victim of any type of financial fraud, report it to the National Elder Fraud Hotline.
10. In 2019, 70 Months Was the Average Sentence for A Convicted Money Laundering Offender.
Stats in America revealed that in 2019, the average sentence for a convicted money laundering offender was nearly 6 years.
That 70 months represents 5.833… years.
The number of offenders with knowledge that the money was illegally obtained rose by 19.7% in 2019.
The sentencing of money laundering offenders who had little participation in the scheme received reduced sentences, at 11.5% of all offenses.
11. In 2019, Florida Was at The Top of The List for The Most Money Laundering Offenders.
In 2019, the United States Sentencing Commission (USSC) shared statistics that reported Florida as the state with the highest number of offenders.
The Southern District of Florida had 42 offenders.
After Florida, there is the Southern District of New York and Texas with 33 money laundering offenders each.
There were 31 offenders in the Northern District of Ohio, and 26 offenders in the Western District of Missouri.
12. In 2019, Researchers from Lexis Nexis Risk Solutions Discovered Anti-Money Laundering Compliance Costs of $31.5 Billion Across Financial Firms in The United States and Canada.
This research proved that standard anti-money laundering (AML) solutions are insufficient.
This is happening even in the wake of the financial sector spending tons of money on AML solutions.
This LexisNexis Solutions study also discovered that a layered resolution is more effective and successful.
This is especially true when machine learning (ML) and artificial intelligence (AI) are in play.
Financial compliance can no longer solely rely on manual efforts to AML compliance because they are obscured by false positives.
13. Wachovia Bank Is an Example of One of The Most Prominent Money Laundering Scandals in America.
Wachovia was founded in 1879, so it was a true American institution in the financial sector. In 2008, it was acquired by Wells Fargo & Company.
Unfortunately, in 2010, it was discovered that the bank was letting Mexican drug cartels launder money to the tune of $390 billion, through its many branches.
Wachovia was fined $160 million in fines to avoid being prosecuted, according to news and media.
Billions of dollars were discovered when the smugglers bought a plane with the laundered money. This caused a huge scandal.
14. North Korea-Linked Companies Were Suspected of Money Laundering Through American Banks.
These North Korean organizations were suspected of laundering over $178.8 million over several years through American banks the Bank of New York Mellon and JP Morgan.
It was confirmed that the transactions cleared the banks.
You should know that during this time, North Korea was sanctioned against access to the international financial system.
However, they still managed to move some funds through these United States banks.
15. Statistics in America Reveal that An Obscure AML Law Costs International Travelers Millions Each Year.
An obscure US law that most international travelers are unaware of requires that travelers declare the cash they carry when it’s more than $10,000.
This law is the Bank Secrecy Act and it’s designed to stop money laundering by offenders. It’s costing international travelers millions of dollars a year.
Border Patrol and Customs (CBP) agents view this law as a vital tool in fighting money laundering and possible terrorist activities.
Critics debate this law, claiming that these CBP officials do very little to warn travelers of this law that requires them to report/declare cash in amounts over $10,000.
16. In 2020, 64,565 Cases Were Reported to The USSC and Only 755 Were Money Laundering Offenses.
The 2019 statistics revealed that out of 76,538 cases reported to the USSC, only 990 were money laundering offenses.
The figures for money laundering and cases reported to the USSC went down between 2019 and 2020.
As the report suggests, money laundering offenses have decreased by 30.4% since 2016. However, the median losses are up by close to $100,000.
In 2019, the losses accounted for $208,000. In 2020, the losses accounted for $301,606.
The agency also reported that 20.3% of the 2020 losses were $40,000 or less, but 22% of the losses came to over $1.5 million.
17. United States Money Laundering Accounts for 15% to 38% of All Money Laundering Across the Globe.
Statistics state that money laundering in the United States accounts for between 15% and 38% of all money laundering incidents in the world.
Just for some perspective, the amount of money laundered worldwide comes to between $800 billion and $2 trillion each year.
The United States represents at least $300 billion of the worldwide figures.
That is why it represents the percentage of annual money laundering cases. That’s quite the thing to have hanging over the country.
18. Out Of All 2019 Anti-Money Laundering Fines, the United States Served up 25 Penalties of $2.29 Billion.
In 2019, American legal authorities shone across the world in policing financial crimes, including money laundering.
They have imposed roughly 50% of all global penalties. The country that is closest to the United States is the United Kingdom. with 12 cases.
On the other end of this spectrum, France dealt with the highest penalty, which was $5.1 billion.
The average money laundering fine in 2019 came to $145.33 million. Overall, America had 25 penalties between January and December 2019.
Global Money Laundering Statistics
This final section of statistics will address the worldwide facts, data, and figures.
Let’s see what the data shows us about the global money laundering problem.
19. In The United Kingdom, 30% of Money Laundering Mules Are Under 21 Years Old.
Money mules are targeted through recruiters through fake online job ads designed to target Gen-Z and a few Millennials, ranging in age from 21 to 30 years old.
However, 30% of those who answer the ads are under 21 years old.
Money laundering mules, also called money mules, are people who transfer illegal funds obtained illegally by criminals.
Money mules are getting younger and younger, according to law enforcement in the United Kingdom.
Most of these young people are unaware of the illicit activity in which they are engaging.
20. Only 0.1% of Money Laundering Funds Are Recovered Due to Anti-Money Laundering Activities.
Even with merged efforts across nations to fight money laundering activities, the methods are still ineffective.
According to a study from La Trobe University in Melbourne, Australia, headed by Ronald F. Pol, only 0.1% of illicit funds from money laundering are recovered.
Therefore, all the AML efforts from all over the world are not working well to combat this criminal element.
So, all these organized crime groups, offenders, and criminals can freely use the funds they obtained through illegal acts.
21. Fiat Currency Is Laundered 400 Times More than What Is Laundered in Cryptocurrency.
One of the reasons that fiat currency is still more highly laundered than crypto assets is because it’s harder to launder crypto at scale.
Therefore, instances of cryptocurrency money laundering are substantially lower than in fiat currency.
That said, cryptocurrency money laundering did experience a 30% rise in 2021.
According to a Cynopsis Solutions case study, fiat currency is laundered 400 times more than cryptocurrency.
22. The Country at The Highest Risk of Money Laundering Activities Is Afghanistan.
Statistics reveal that Afghanistan is a country at the greatest risk of money laundering schemes when compared with other countries.
Countries that are at high risk of experiencing money laundering crimes are dormant and weak in their oversight of such crimes.
They fail to focus on money laundering.
A 2020 Basel AML index report showed Afghanistan at 8.16, accounting for the highest risk of money laundering.
This data is based on data taken from public records like those of the Financial Action Task Force (FATF).
23. It’s Estimated that Global Money Laundering Activities Cost the World Between 2% and 5% of Global GDP.
The United Nations estimated around $800 billion to $2 trillion, is laundered each year across the world.
This is costing the whole world between 2% and 5% of overall GDP. GDP is important to every country’s economy.
GDP is the gross domestic product, which represents the standard measure of the value added by the creation of services and goods produced in any given country during a certain period.
24. Roughly 95% of System-Generated Money Laundering Alters Resulted in False Positives.
While the high rate of false positives is good news for money laundering offenders and other financial criminals, it’s bad news for banks and financial institutions.
When analysts are chasing all these false positives, criminals are getting away with financial crimes, including money laundering.
Banks and other financial organizations monitor suspicious transactions using special software systems.
They are designed to find unusually high cash deposits and recurrent monetary transfers between banks or bank accounts.
Even with such a technological system in place, 95% of the alerts are still false positives.
25. FinCEN, The Financial Crimes Enforcement Network, Is the Entity that Maintains the All-Cash Purchase Limit for Real Estate at $300,000.
FinCEN is part of the US Treasury, which means it manages, monitors, and maintains thresholds for all-cash property purchases at $300,000.
The goal is supposed to help fight back at money laundering problems.
What this means is that a person can only purchase real estate with all cash with up to $300,000 without scrutiny.
The agency can impose special reporting requirements for those who attempt to buy real estate for all cash that exceeds the $300,000 limit.
What’s the Most Common Type of Money Laundering?
Smurfing is the most common type of money laundering. It’s also known as structuring, which is a technique that breaks up larger amounts of cash into small deposits.
Furthermore, money laundering offenders also spread out these small deposits across different bank accounts to prevent being detected.
Some other types of money laundering can include investing in real estate or businesses (unrelated assets), buying and selling commodities, counterfeiting, and gambling.
What Region Is Considered the Money Laundering Capital of The World?
British Columbia has managed to take the prize of being the money laundering capital.
Though London used to be one of the worst cities on the globe for money laundering,
BC has taken over that role as of 2019. In 2019, roughly $5 billion in dirty money was laundered in BC.
How Many Individuals Are Impacted by Money Laundering?
It’s difficult to find out how many people are impacted by money laundering.
However, we do know that there are 1,000 reported incidents in the United States alone every year. The amount of money lost is massive.
Even with only 990 money laundering incidents in 2019, around $300 billion is laundered through the US every year.
That’s between 15% and 38% of all the money that is laundered worldwide.
Generally speaking, it’s difficult to pinpoint how many individuals are directly impacted by money laundering crimes.
Where Does Drug Money Go After It’s Been Seized?
The agencies that recover and seize drug money divide it up among one another.
According to law enforcement, the money usually goes to education, equipment, and training needed to aid law enforcement officers in crime fighting endeavors.
What Entities Investigate Money Laundering Activities?
In the United States, money laundering incidents are investigated by FinCEN, under the supervision of the US Department of Treasury.
The Department of Justice (DoJ) and the FBI often help investigate money laundering crimes.
This is because money laundering commonly involves organized crime syndicates, terrorists, or drug cartels.
What Amount of Money Is Considered Money Laundering?
The US Code Section 1957 states that taking part in financial transactions in property obtained by unlawful activity through a foreign bank, U.S. bank, or any other financial institution in an amount over $10,000 is categorized as a money laundering crime.
What’s the Reason for Money Laundering?
The main purpose of money laundering is to make illegal funds seem like they came from a legit source.
People who earn their money from illegal activities are usually very careful about how they process the money they obtained by using money laundering techniques.
The goal is to eliminate the money “trail” so that it cannot be traced back to them or their criminal activities.
Now that you’ve read about the global money laundering statistics that impact the world, America, and individuals, you should have a better picture of the negative effect it has on several levels.
Like identity theft, which is now often used in money laundering schemes, this is not a victimless crime.
Not only can it harm individuals, but it can also harm banks, local economies, and even the global economy.
Globally, billions to trillions of dollars are lost due to money laundering every year.
Even with all the advanced technology used to detect suspicious financial activities, it can’t seem to effectively catch money laundering.
With 95% of all suspicious financial activity alerts being false positives, analysts are chasing down false positives instead of chasing down money laundering incidents.
Hopefully, the technology sector is working on better and more efficient ways to monitor and detect money laundering activities instead of producing mostly false positives. We can only hope.