Academic Master

Business and Finance

Organized Crime Through Legitimate Business

The detection and conviction of organized crimes have become the chief challenges for law enforcement agencies and the judiciary. With the advancement in technology by manifolds in recent decades, criminals have adopted advanced means to conceal illegal money. Consequentially, Investigation agencies have designed ways to counter the offenders. It is essential to document the most brainy ways of violations and the path followed by investigators to decipher those methods so that concealed and apparently legitimate crimes can be tracked.

The prime objective of money launderers is to dodge security and exchange commissions, which are placed to ensure a legal money trail. To avoid apprehension, offenders use legitimate accounts and individuals to transfer illegally obtained money into a legal account through legitimate means. Usually, money launderers commingle the illegitimate money with lawfully attained wealth so that illegal money appears to be obtained through a permissible channel. Another method used by criminals is to sell a product in “black”. Offenders obtain the product at extraordinary discounts by showing legitimate documents to fund charities and welfare organizations (Boles, 2017). However, the product is sold at a higher price, which allows the company to make huge profits. The offence goes unnoticed because of legitimate documentation.

A case from Kansas was reported where four pharmacies were established by criminals who obtained drugs at discounted prices. The perpetrators had thorough documentation to prove the legitimacy, and they resold it to wholesalers in California and Nevada, achieving profits of over a million dollars in two years. These pharmacies were counterfeits, and the owners of the original pharmacies whose names were used remained unaware of the development. (Conlan, 1991). The scam was traced by a drug regulator with the help of the FBI. The regulator noticed none of the drugs purchased by the company were meant for old people despite the fact that discounts were sought in the name of nursing homes (Conlan, 1991).

Researchers have formulated Social Network Analysis (SNA) to track criminal networks, especially money laundering. The approach categorizes criminals into two kinds. The first kind of group also known as “social capital” are those who have deep links with other offenders. They serve as mediators or brokers between other criminal gangs. The other groups of criminals called “human capital” have specialized skills or have a great amount of wealth. Social capital makes it more difficult to track their interconnectivity, reinforcing each of the gangs. By using SNA, researchers assign attributes to each suspect on the basis of their calls and in-person contact with other alleged offenders (Bright et al., 2017).

The Patriot Act of 2001 reinforces the Anti Money Laundering (AML) laws by obliging financial institutions to assist concerned security agencies with classified relevant information. The Financial Action Task Force (FATF), the global body that looks after money laundering, applauded AML in 2016 for being comprehensive and effective.

Although SNA is a sound approach to dealing with legitimate crimes, it has seen a backlash, too, for its role in compromising privacies and liberties. While establishing connections among criminal gangs, a vast number of people have to undergo investigations, of which they are usually unaware. AML is effective in tracking human capital by studying the information from financial institutions, but tracking social capital is still a challenge, and only partial success is achieved. At times, jurisdiction issues delay the investigation, allowing violators to evade the law.

The offenders are benefitting from the vulnerabilities in systems and laws. Governments around the world need to increase cooperation to eliminate the interoperability of criminal gangs. Besides legislation, technologies like SNA should be implemented to track down large-scale organized crimes.


Boles, J. R. (2017). Anti-Money Laundering Initiatives for the South African Real Estate Market. Journal of Comparative Urban Law and Policy1(1), 14.

Conlan, M. F. (1991). Organized crime linked to drug diversion scam. Drug Topics, 8, 48.

Bright, D., Greenhill, C., Britz, T., Ritter, A., & Morselli, C. (2017). Criminal network vulnerabilities and adaptations. Global Crime18(4), 424-441.



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