Money laundering in organised crime : uncovering the financial system of illegal crime organisations

Abstract

The term money laundering is complex in itself and becomes even more intricate when examining the sophisticated schemes devised by criminal networks. This research focuses on two major drug cartels, the Sinaloa Cartel and the Medellin Cartel, alongside their infamous leaders, Joaquín "El Chapo" Guzman and Pablo Escobar. This study explores the specific money laundering techniques employed by these organisations. Whilst not offering a comprehensive account of all criminal operations, the research provides valuable insight into commonly used methods, which often share core similarities despite variations in networks, actors, and operational contexts. Once the techniques were identified, the study assessed what appeared the most efficient, highlighting those deemed most effective and practical by the cartels themselves. Throughout this analysis, various similarities, and differences in the laundering strategies of the two cartels became apparent. The research also examined the cartels' activities through the lens of the Rational Choice Theory and the Routine Activity Theory, evaluating the extent to which organised crime and money laundering align with these criminological models. The methodology justified the selection of the two cartels, with further details on the search strategy available in the appendix. The findings revealed fifteen distinct methods, with some schemes involving multiple techniques. Amongst them, TradeBased Money Laundering emerged as the most effective individual method. Ultimately, the cartels’ operations aligned with both theoretical frameworks, reinforcing their relevance and demonstrating that the research objectives were successfully met.