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Badal-Valero, E, Alvarez-Jareño, JA and Pavía, JM (2018)

Combining Benford's Law and machine learning to detect money laundering. An actual Spanish court case

Forensic Science International 282, pp. 24-34.

ISSN/ISBN: Not available at this time. DOI: 10.1016/j.forsciint.2017.11.008



Abstract: OBJECTIVES: This paper is based on the analysis of the database of operations from a macro-case on money laundering orchestrated between a core company and a group of its suppliers, 26 of which had already been identified by the police as fraudulent companies. In the face of a well-founded suspicion that more companies have perpetrated criminal acts and in order to make better use of what are very limited police resources, we aim to construct a tool to detect money laundering criminals. METHODS: We combine Benford's Law and machine learning algorithms (logistic regression, decision trees, neural networks, and random forests) to find patterns of money laundering criminals in the context of a real Spanish court case. RESULTS: After mapping each supplier's set of accounting data into a 21-dimensional space using Benford's Law and applying machine learning algorithms, additional companies that could merit further scrutiny are flagged up. CONCLUSIONS: A new tool to detect money laundering criminals is proposed in this paper. The tool is tested in the context of a real case.


Bibtex:
@article{, title = "Combining {Benford's Law} and machine learning to detect money laundering. An actual Spanish court case", journal = "Forensic Science International", volume = "282", pages = "24--34", year = "2018", issn = "0379-0738", doi = "https://doi.org/10.1016/j.forsciint.2017.11.008", url = "http://www.sciencedirect.com/science/article/pii/S0379073817304644", author = "Elena Badal-Valero and Jos{\'e} A. Alvarez-Jare{\~n}o and Jose M. Pav{\'i}a", }


Reference Type: Journal Article

Subject Area(s): Accounting