High-End and Cash-Based Money Laundering: Defining and Disaggregating Complex Phenomena

Abstract

High End Money Laundering (HEML) was first introduced as a concept in the UK in 2014 and has since been held up, along with Cash Based Money Laundering (CBML), as the UK’s top money laundering risk (National Crime Agency (NCA), (2014). High End Money Laundering Strategy and Action Plan, accessed via: file (nationalcrimeagency.gov.uk), on 16/07/2023; HM Government, (2023). Economic Crime Plan 2, accessed via: https://www.gov.uk/government/publications/economic-crime-plan-2023-to-2026, on 16/07/2023). Whilst most writing on CBML and HEML define these terms as relating to the nature of the original criminal proceeds (i.e., whether they were originally generated as cash or as electronic money) there is blurring and ambiguity in the terms (National Crime Agency (NCA), (2014). High End Money Laundering Strategy and Action Plan, accessed via: file (nationalcrimeagency.gov.uk), on 16/07/2023). People also talk about HEML and CBML methods, which do not necessarily relate to what form the original criminal proceeds were in (HM Government, (2023). Economic Crime Plan 2, accessed via: https://www.gov.uk/government/publications/economic-crime-plan-2023-to-2026, on 16/07/2023). This definitional confusion is underpinned by a near total absence of empirical investigations of the phenomena. In this paper I use unique access to case level detail from 31 of His Majesty’s Revenue and Customs’ (HMRC) Fraud Investigation Service money laundering investigations, to explore the hypothesis that high-end vs. cash-based is a meaningful disaggregation. I find that what form the original criminal proceeds were generated in does meaningfully impact patterns of subsequent money laundering and is therefore conceptually useful. I also find co-occurrence between HEML methods and CBML methods and use of cash in cases where the original proceeds were electronic. However, I argue for more precise terminology, both to enhance our understanding of these phenomena and to increase our ability to identify interdiction opportunities. This paper is an original and unpublished extension of research originally conducted by (Matanky-Becker and Cockbain, Crime, Law and Social Change 77:405–429, 2021)).