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Overview of international fraud operations relating to corruption

Public and private sectors are both targets of international fraud operations. In the public sector, corruption by public officials enables fraudulent activities such as value added tax (VAT) fraud or in procurement schemes, and there is a possibility of the proceeds of fraud being used to buy influence from public officials. In the private sector, infiltration by transnational organised criminals is usually through fraud, extortion and corruption (in the forms of money laundering and asset misappropriation). To successfully set up the fraud schemes and launder the proceeds, fraudsters rely on the services of professional enablers such as lawyers, accountants, bankers and real estate agents who willingly or negligently overlook their anti-money laundering obligations. This open doors for the criminals to operate in the global market. Hence, tightening anti-money laundering measures may assist in curbing international fraud operations. Also, education or awareness programmes on anti-corruption and anti-bribery as well as fraud for employees (public/private) and the general public may equip them to better prevent, identify, deter and address fraud and corruption.

23 July 2020
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Main points

  • Various instances of internal and external fraud that involve abuse of power link the phenomenon with corruption.
  • In the public sector, fraudsters use corruption to minimise law enforcement or operational risks by public officials in schemes such as VAT fraud or procurement fraud.
  • Corruption and fraud in the private sector often overlap when it comes to white-collar crimes.
  • Professional enablers such as bankers, real estate agents, notaries, lawyers, accountants and corporate service providers may willingly or negligently assist in setting up fraudulent schemes or laundering the proceeds of fraud.
  • Money laundering and fraud are connected in the sense that criminals who commit fraud eventually need to monetise that information and launder the proceeds so that funds appear legitimate.

Cite this publication


Rahman, K.; Duri, J.; (2020) Overview of international fraud operations relating to corruption. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2020:19)

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About the authors

Kaunain Rahman

Kaunain received her Master's in Corruption and Governance from The Centre for the Study of Corruption at the University of Sussex in the UK where her focus area of research was corruption in international business. She works as Research Coordinator at Transparency International (TI), and her main responsibilities lie with the Anti-Corruption Helpdesk.

Jorum is a Research Coordinator at Transparency International, with his primary responsibilities at the Anti-Corruption Helpdesk.

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


organised crime, fraud, money laundering

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