Pub Date : 2024-07-08DOI: 10.1108/jfc-01-2024-0054
Simon Mackenzie
Purpose This paper reviews the recent collapse of two cryptocurrency enterprises, FTX and Celsius. These two cases of institutional bankruptcy have generated criminal charges and other civil complaints, mainly alleging fraud against the CEOs of the companies. This paper aims to analyse the fraud leading to these bankruptcies, drawing on key concepts from the research literature on economic crime to provide explanations for what happened. Design/methodology/approach This paper uses a case study approach to the question of how large financial institutions can go off the rails. Two theoretical perspectives are applied to the cases of the FTX and Celsius collapses. These are the “normalisation of deviance” theory and the “cult of personality”. Findings In these two case studies, there is an interaction between the “normalisation of deviance” on the institutional level and the “cult of personality” at the level of individual leadership. The CEOs of the two companies promoted themselves as eccentric but successful examples of the visionary tech finance genius. This fostered the normalisation of deviance within their organisations. Employees, investors and regulators allowed criminal and highly financially risky practices to become normalised as they were caught up in the attractive story of the trailblazing entrepreneur making millions in the new cryptoeconomy. Originality/value This paper makes a contribution both to the case study literature on economic crime and to the development of general theory in economic criminology.
{"title":"Crypto collapse: the cult of personality and the normalisation of fraud in FTX and Celsius","authors":"Simon Mackenzie","doi":"10.1108/jfc-01-2024-0054","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0054","url":null,"abstract":"\u0000Purpose\u0000This paper reviews the recent collapse of two cryptocurrency enterprises, FTX and Celsius. These two cases of institutional bankruptcy have generated criminal charges and other civil complaints, mainly alleging fraud against the CEOs of the companies. This paper aims to analyse the fraud leading to these bankruptcies, drawing on key concepts from the research literature on economic crime to provide explanations for what happened.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses a case study approach to the question of how large financial institutions can go off the rails. Two theoretical perspectives are applied to the cases of the FTX and Celsius collapses. These are the “normalisation of deviance” theory and the “cult of personality”.\u0000\u0000\u0000Findings\u0000In these two case studies, there is an interaction between the “normalisation of deviance” on the institutional level and the “cult of personality” at the level of individual leadership. The CEOs of the two companies promoted themselves as eccentric but successful examples of the visionary tech finance genius. This fostered the normalisation of deviance within their organisations. Employees, investors and regulators allowed criminal and highly financially risky practices to become normalised as they were caught up in the attractive story of the trailblazing entrepreneur making millions in the new cryptoeconomy.\u0000\u0000\u0000Originality/value\u0000This paper makes a contribution both to the case study literature on economic crime and to the development of general theory in economic criminology.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" 17","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141668468","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-08DOI: 10.1108/jfc-12-2023-0330
Michael Kushelevitch
Purpose This study aims to explore the impact of cryptocurrency on intelligence activities by law enforcement agencies, focusing on the changing landscape due to its exploitation by terrorist organizations. Investigating the dual nature of cryptocurrency as a global payment system and a potential threat to national security, the purpose is to understand how law enforcement adapts its strategies in response to this evolving challenge. Design/methodology/approach The research uses a comprehensive approach by analyzing the integration of research and collection stages within the intelligence circle, particularly emphasizing blockchain analysis. By examining the actions of law enforcement authorities in the case study of Hamas’ crypto fundraising campaign, the study highlights how open-source information, accessible through blockchain, allows for strategic collaboration between law enforcement authorities and specialist companies in the field of intelligence analysis. This methodology enables law enforcement to enhance their intelligence gathering capabilities to trace illicit activity by terrorist organizations, leading to a successful seizure of crypto funds. Findings The findings reveal a symbiotic relationship between terrorist organizations and the crypto space, with the latter becoming an attractive means for financing activities. Law enforcement, in response, has evolved its intelligence practices, combining collection and research to trace and crack down on illicit crypto transactions. Originality/value The study sheds light on the dynamic challenges faced by law enforcement in maintaining an effective intelligence response to the ever-evolving methods used by terrorist organizations in using cryptocurrencies.
{"title":"Unveiling the crypto-terror nexus: law enforcement intelligence challenges against terrorist financing","authors":"Michael Kushelevitch","doi":"10.1108/jfc-12-2023-0330","DOIUrl":"https://doi.org/10.1108/jfc-12-2023-0330","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore the impact of cryptocurrency on intelligence activities by law enforcement agencies, focusing on the changing landscape due to its exploitation by terrorist organizations. Investigating the dual nature of cryptocurrency as a global payment system and a potential threat to national security, the purpose is to understand how law enforcement adapts its strategies in response to this evolving challenge.\u0000\u0000\u0000Design/methodology/approach\u0000The research uses a comprehensive approach by analyzing the integration of research and collection stages within the intelligence circle, particularly emphasizing blockchain analysis. By examining the actions of law enforcement authorities in the case study of Hamas’ crypto fundraising campaign, the study highlights how open-source information, accessible through blockchain, allows for strategic collaboration between law enforcement authorities and specialist companies in the field of intelligence analysis. This methodology enables law enforcement to enhance their intelligence gathering capabilities to trace illicit activity by terrorist organizations, leading to a successful seizure of crypto funds.\u0000\u0000\u0000Findings\u0000The findings reveal a symbiotic relationship between terrorist organizations and the crypto space, with the latter becoming an attractive means for financing activities. Law enforcement, in response, has evolved its intelligence practices, combining collection and research to trace and crack down on illicit crypto transactions.\u0000\u0000\u0000Originality/value\u0000The study sheds light on the dynamic challenges faced by law enforcement in maintaining an effective intelligence response to the ever-evolving methods used by terrorist organizations in using cryptocurrencies.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" 453","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141669314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-06-03DOI: 10.1108/jfc-01-2024-0010
Iram Naz, Saleh Nawaz Khan
Purpose This study aims to assess the effectiveness of forensic accounting techniques to prevent and detect fraudulent activities in firms in Pakistan. Design/methodology/approach A descriptive research approach has been adopted in this study. Primary data has been collected through structured questionnaires distributed to professionals from investigating firms, professional bodies and field researchers. The independent variables that were analyzed included fraud investigation, litigation support and dispute resolution, whereas the dependent variables were fraud detection and prevention. The Statistical Package for Social Sciences has been used for data analysis to derive objective results. Findings This research reveals that forensic accounting techniques such as fraud investigation, litigation support and dispute resolution have a positive impact on fraud detection and prevention in Pakistani firms. Practical implications Firms should train staff on forensic accounting techniques, implement fraud risk management and anti-corruption policies, conduct regular financial statement audits and develop a whistleblower protection program to encourage employees to report fraudulent activities. The government should develop regulations and guidelines to promote the use of forensic accounting in firms. Originality/value This study is covering the gap in literature on financial fraud and forensic accounting practices concerning emerging economies such as Pakistan. This study can serve as a valuable resource for firms and policymakers to strengthen their fraud prevention efforts and build a more robust culture of financial integrity.
{"title":"Impact of forensic accounting on fraud detection and prevention: a case of firms in Pakistan","authors":"Iram Naz, Saleh Nawaz Khan","doi":"10.1108/jfc-01-2024-0010","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0010","url":null,"abstract":"Purpose\u0000This study aims to assess the effectiveness of forensic accounting techniques to prevent and detect fraudulent activities in firms in Pakistan.\u0000\u0000Design/methodology/approach\u0000A descriptive research approach has been adopted in this study. Primary data has been collected through structured questionnaires distributed to professionals from investigating firms, professional bodies and field researchers. The independent variables that were analyzed included fraud investigation, litigation support and dispute resolution, whereas the dependent variables were fraud detection and prevention. The Statistical Package for Social Sciences has been used for data analysis to derive objective results.\u0000\u0000Findings\u0000This research reveals that forensic accounting techniques such as fraud investigation, litigation support and dispute resolution have a positive impact on fraud detection and prevention in Pakistani firms.\u0000\u0000Practical implications\u0000Firms should train staff on forensic accounting techniques, implement fraud risk management and anti-corruption policies, conduct regular financial statement audits and develop a whistleblower protection program to encourage employees to report fraudulent activities. The government should develop regulations and guidelines to promote the use of forensic accounting in firms.\u0000\u0000Originality/value\u0000This study is covering the gap in literature on financial fraud and forensic accounting practices concerning emerging economies such as Pakistan. This study can serve as a valuable resource for firms and policymakers to strengthen their fraud prevention efforts and build a more robust culture of financial integrity.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":"21 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141228544","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-21DOI: 10.1108/jfc-01-2024-0056
L. Curlewis, Katelyn-Mae Carter
Purpose The purpose of this paper is to give light to the present order of state capture and corruption within South Africa at present. South Africans often consider the National Prosecuting Authority to be an independent body which is free of the corruption of the rest of the Government; however, the situation that surrounds the Kusile Tender will suggest otherwise. Design/methodology/approach This paper’s approach is purely qualitative using journal articles, textbooks, reports, periodicals, speeches and legislation as its basis. It is through a consolidation of this literature that this paper was formed. Findings This paper determines that even the National Prosecuting Authority of South Africa is not free from the scourge that is corruption through the depiction of the Kusile Tender. Within this tender, the National Prosecuting Authority entered into a non-prosecution agreement with a defendant, Asea Brown Boveri, which cannot be accounted for in the Criminal Procedure Act 51 of 1977. Originality/value The concept of state capture and corruption are not new to any jurisdiction, let alone South Africa. This paper, however, intends to give insight into how even the departments which the public believe to be (and are constitutionally mandated to be) independent can fall prey to corrupt dealings.
{"title":"Under the influence: the Kusile tender and state capture permeating the national prosecuting authority","authors":"L. Curlewis, Katelyn-Mae Carter","doi":"10.1108/jfc-01-2024-0056","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0056","url":null,"abstract":"Purpose\u0000The purpose of this paper is to give light to the present order of state capture and corruption within South Africa at present. South Africans often consider the National Prosecuting Authority to be an independent body which is free of the corruption of the rest of the Government; however, the situation that surrounds the Kusile Tender will suggest otherwise.\u0000\u0000Design/methodology/approach\u0000This paper’s approach is purely qualitative using journal articles, textbooks, reports, periodicals, speeches and legislation as its basis. It is through a consolidation of this literature that this paper was formed.\u0000\u0000Findings\u0000This paper determines that even the National Prosecuting Authority of South Africa is not free from the scourge that is corruption through the depiction of the Kusile Tender. Within this tender, the National Prosecuting Authority entered into a non-prosecution agreement with a defendant, Asea Brown Boveri, which cannot be accounted for in the Criminal Procedure Act 51 of 1977.\u0000\u0000Originality/value\u0000The concept of state capture and corruption are not new to any jurisdiction, let alone South Africa. This paper, however, intends to give insight into how even the departments which the public believe to be (and are constitutionally mandated to be) independent can fall prey to corrupt dealings.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":"5 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141114689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-21DOI: 10.1108/jfc-12-2023-0329
K. A. Kamarudin, Wan Adibah Wan Ismail, I. Harymawan, Akmalia Mohamad Ariff
Purpose This study aims to examine the effect of audit firm tenure (AFT) on corporate tax avoidance (CTA) and the moderating effect of the COVID-19 pandemic. Design/methodology/approach The sample comprises 41,074 firm-year observations from 32 countries from 2015 to 2020, for which data are collected from various sources: financial data from the Refinitiv database, country corporate tax rates from the Tax Foundation, and other country-level data from the World Bank database. The authors use the book tax difference to measure CTA and multiple proxies for AFT. Findings This study finds that a longer AFT is associated with higher CTA, confirming the notion that long AFT impairs auditor independence. The findings remain robust when considering various AFT proxies, incorporating Hofstede’s cultural factors, using weighted least-squares estimation and addressing endogeneity through propensity score matching. This study also finds a non-linear relationship between extended client and auditor relationships and CTA, supporting the mandatory audit firm rotation regulation and increasing investors’ caution regarding the consequences of extended client–auditor relationships on firm behaviour. Research limitations/implications This study offers new evidence on the effect of the COVID-19 pandemic on the link between AFT and CTA and documents a non-linear relationship between AFT, which has not been addressed in prior studies. Practical implications The findings of this study have several significant practical implications. First, governments and policymakers gain insights into the consequences of extended auditor–client relationships, hence calling for a review of auditing and taxation regulations. Second, the findings provide important insights into the issue of auditor independence, especially during long engagements and crises such as COVID-19. Finally, investors and tax authorities should be more cautious about the risks of aggressive tax avoidance during crisis periods. Originality/value To the best of the authors’ knowledge, this is the first study to use a global data set to investigate the effect of AFT on CTA during the COVID-19 pandemic.
{"title":"Audit firm tenure and corporate tax avoidance: evidence spanning COVID-19 pandemic","authors":"K. A. Kamarudin, Wan Adibah Wan Ismail, I. Harymawan, Akmalia Mohamad Ariff","doi":"10.1108/jfc-12-2023-0329","DOIUrl":"https://doi.org/10.1108/jfc-12-2023-0329","url":null,"abstract":"Purpose\u0000This study aims to examine the effect of audit firm tenure (AFT) on corporate tax avoidance (CTA) and the moderating effect of the COVID-19 pandemic.\u0000\u0000Design/methodology/approach\u0000The sample comprises 41,074 firm-year observations from 32 countries from 2015 to 2020, for which data are collected from various sources: financial data from the Refinitiv database, country corporate tax rates from the Tax Foundation, and other country-level data from the World Bank database. The authors use the book tax difference to measure CTA and multiple proxies for AFT.\u0000\u0000Findings\u0000This study finds that a longer AFT is associated with higher CTA, confirming the notion that long AFT impairs auditor independence. The findings remain robust when considering various AFT proxies, incorporating Hofstede’s cultural factors, using weighted least-squares estimation and addressing endogeneity through propensity score matching. This study also finds a non-linear relationship between extended client and auditor relationships and CTA, supporting the mandatory audit firm rotation regulation and increasing investors’ caution regarding the consequences of extended client–auditor relationships on firm behaviour.\u0000\u0000Research limitations/implications\u0000This study offers new evidence on the effect of the COVID-19 pandemic on the link between AFT and CTA and documents a non-linear relationship between AFT, which has not been addressed in prior studies.\u0000\u0000Practical implications\u0000The findings of this study have several significant practical implications. First, governments and policymakers gain insights into the consequences of extended auditor–client relationships, hence calling for a review of auditing and taxation regulations. Second, the findings provide important insights into the issue of auditor independence, especially during long engagements and crises such as COVID-19. Finally, investors and tax authorities should be more cautious about the risks of aggressive tax avoidance during crisis periods.\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study to use a global data set to investigate the effect of AFT on CTA during the COVID-19 pandemic.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":"18 19","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141118738","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-13DOI: 10.1108/jfc-01-2024-0044
Paulina Arroyo, Nadia Smaili
Purpose For more than four decades, scholars from diverse disciplines and countries have been interested in the act of whistleblowing. To battle financial fraud, financial regulators have been developing whistleblowing programs to motivate and protect whistleblowers, i.e. those who sound the alarm after witnessing an illegal act in their organization. The purpose of this article is to review five historical phases of whistleblowing research. The authors analyze the themes covered by whistleblowing studies conducted over the past 50 years and draw a snapshot of the evolution of whistleblowing research. Design/methodology/approach The authors examine academic papers published between 1970 and 2022 and inventory the disciplines involved in the literature and changes in the definition of whistleblowing. Findings The findings show the progress made in academic research (especially for the accounting discipline) regarding whistleblowing. The themes covered by academic studies became progressively diverse. However, this broader scope limited the depth of analysis and the level of self-criticism in the academic research. All but a few articles fail to view whistleblowing in light of its actual level of complexity, and the rationale behind limiting the definition of whistleblowing can only increase this myopia. Although most academic studies have adopted Near and Miceli (1985) definition of whistleblowing, the literature has yet to reach a consensus. Indeed, the analysis shows that Near and Miceli’s (1985) definition of whistleblowing is incomplete and narrow by today’s standards, not to mention out of step with regulators’ needs. Originality/value The main contributions are offering a big picture of whistleblowing academic research's evolution and proposing a more complete and updated view of this act.
目的四十多年来，来自不同学科和国家的学者一直对举报行为很感兴趣。为了打击金融欺诈，金融监管机构一直在制定举报计划，以激励和保护举报人，即那些在目睹其所在机构的非法行为后发出警报的人。本文旨在回顾举报研究的五个历史阶段。作者分析了过去 50 年来举报研究涉及的主题，并勾勒出举报研究演变的快照。研究结果研究结果表明，学术研究（尤其是会计学科）在举报方面取得了进展。学术研究涉及的主题逐渐多样化。然而，范围的扩大限制了学术研究的分析深度和自我批评水平。除少数文章外，其他所有文章都没有从举报的实际复杂程度来看待举报，而限制举报定义的理由只会加剧这种近视。尽管大多数学术研究都采用了 Near 和 Miceli（1985 年）对举报的定义，但文献尚未达成共识。事实上，分析表明，按照当今的标准，Near 和 Miceli（1985 年）的举报定义是不完整和狭隘的，更不用说与监管机构的需求脱节了。
{"title":"Whistleblowing academic research: historical perspective","authors":"Paulina Arroyo, Nadia Smaili","doi":"10.1108/jfc-01-2024-0044","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0044","url":null,"abstract":"\u0000Purpose\u0000For more than four decades, scholars from diverse disciplines and countries have been interested in the act of whistleblowing. To battle financial fraud, financial regulators have been developing whistleblowing programs to motivate and protect whistleblowers, i.e. those who sound the alarm after witnessing an illegal act in their organization. The purpose of this article is to review five historical phases of whistleblowing research. The authors analyze the themes covered by whistleblowing studies conducted over the past 50 years and draw a snapshot of the evolution of whistleblowing research.\u0000\u0000\u0000Design/methodology/approach\u0000The authors examine academic papers published between 1970 and 2022 and inventory the disciplines involved in the literature and changes in the definition of whistleblowing.\u0000\u0000\u0000Findings\u0000The findings show the progress made in academic research (especially for the accounting discipline) regarding whistleblowing. The themes covered by academic studies became progressively diverse. However, this broader scope limited the depth of analysis and the level of self-criticism in the academic research. All but a few articles fail to view whistleblowing in light of its actual level of complexity, and the rationale behind limiting the definition of whistleblowing can only increase this myopia. Although most academic studies have adopted Near and Miceli (1985) definition of whistleblowing, the literature has yet to reach a consensus. Indeed, the analysis shows that Near and Miceli’s (1985) definition of whistleblowing is incomplete and narrow by today’s standards, not to mention out of step with regulators’ needs.\u0000\u0000\u0000Originality/value\u0000The main contributions are offering a big picture of whistleblowing academic research's evolution and proposing a more complete and updated view of this act.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":"27 3","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140984872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-08DOI: 10.1108/jfc-01-2024-0026
Bello Umar
Purpose This study aims to assess terrorism activities to identify measures required to mitigate the rise of terrorism activities and their metamorphosis into organised criminal activity through the prevention, disruption and dismantling of sources of financing terrorism. Design/methodology/approach A qualitative methodology was adopted for this study using descriptive synthesis from recent publications and reports of reputable organisations, i.e. relevant grey literature, key informant interview and a focus group discussion. This triangulation approach was used to cross-validate the findings. Findings The findings revealed that terrorism financing is most likely linked to organised crime for generating revenues and is further used to finance the activities of terrorists. Practical implications Terrorists operate from places with little or no presence of governance and, better still, ungovernable spaces for carrying out legitimate businesses, raising internally generated revenues from protection fees, ransoms and taxes. This space further allows domestic collaboration with local criminal gangs to exploit natural mineral resources. If the market for these resources is across borders, international or transnational criminal groups collaborate with terrorists to move the goods and assist with financial services for the generated proceeds. Originality/value This study assessed the emerging links between terrorism financing and organised crime in Nigeria.
{"title":"Links between terrorism financing and organised crime in Nigeria","authors":"Bello Umar","doi":"10.1108/jfc-01-2024-0026","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0026","url":null,"abstract":"\u0000Purpose\u0000This study aims to assess terrorism activities to identify measures required to mitigate the rise of terrorism activities and their metamorphosis into organised criminal activity through the prevention, disruption and dismantling of sources of financing terrorism.\u0000\u0000\u0000Design/methodology/approach\u0000A qualitative methodology was adopted for this study using descriptive synthesis from recent publications and reports of reputable organisations, i.e. relevant grey literature, key informant interview and a focus group discussion. This triangulation approach was used to cross-validate the findings.\u0000\u0000\u0000Findings\u0000The findings revealed that terrorism financing is most likely linked to organised crime for generating revenues and is further used to finance the activities of terrorists.\u0000\u0000\u0000Practical implications\u0000Terrorists operate from places with little or no presence of governance and, better still, ungovernable spaces for carrying out legitimate businesses, raising internally generated revenues from protection fees, ransoms and taxes. This space further allows domestic collaboration with local criminal gangs to exploit natural mineral resources. If the market for these resources is across borders, international or transnational criminal groups collaborate with terrorists to move the goods and assist with financial services for the generated proceeds.\u0000\u0000\u0000Originality/value\u0000This study assessed the emerging links between terrorism financing and organised crime in Nigeria.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" 26","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141000845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-08DOI: 10.1108/jfc-01-2024-0017
Thomas Dearden, Jill O. Jasperson, Ronald Mellado Miller
Purpose This study aims to investigate the relationship between religiosity, belief in a just world (BJW), trust and affinity fraud. Design/methodology/approach Using an online panel vendor, this study collected survey data from 1,030 participants. Participants are balanced based on US Census data. Findings This study finds evidence that religiosity and, to a lesser extent, trust were correlated with choosing an affinity investor but not BJW. Overall, this study adds to the literature on fraud by examining the potential processes of tricking a victim. Originality/value This study examines the complex decision-making around investing with fraudsters. This study disentangles the relationship between affinity fraud, decision-making, trust and religiosity. Furthermore, this consider the reasons why a shared affinity may increase trust through the lens of the decision-maker.
{"title":"Mechanisms of affinity fraud victimization","authors":"Thomas Dearden, Jill O. Jasperson, Ronald Mellado Miller","doi":"10.1108/jfc-01-2024-0017","DOIUrl":"https://doi.org/10.1108/jfc-01-2024-0017","url":null,"abstract":"Purpose\u0000This study aims to investigate the relationship between religiosity, belief in a just world (BJW), trust and affinity fraud.\u0000\u0000Design/methodology/approach\u0000Using an online panel vendor, this study collected survey data from 1,030 participants. Participants are balanced based on US Census data.\u0000\u0000Findings\u0000This study finds evidence that religiosity and, to a lesser extent, trust were correlated with choosing an affinity investor but not BJW. Overall, this study adds to the literature on fraud by examining the potential processes of tricking a victim.\u0000\u0000Originality/value\u0000This study examines the complex decision-making around investing with fraudsters. This study disentangles the relationship between affinity fraud, decision-making, trust and religiosity. Furthermore, this consider the reasons why a shared affinity may increase trust through the lens of the decision-maker.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" 22","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141001281","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-07DOI: 10.1108/jfc-10-2023-0259
B. Ololade
Purpose The purpose of this study is to determine the strategy adopted by small- and medium-scale enterprise (SME) owners in setting up internal control systems, examine the relationship between the numbers of employees’ fraud and strategy adopted in setting up internal control and evaluate the difference between proactive and reactive strategies in employee’s fraud prevention among SMEs. Design/methodology/approach A survey research approach was adopted to determine whether proactive or reactive strategies were adopted by the SME owners. Specifically, a survey questionnaire was used to gather primary data from selected respondents in Lagos and Oyo States. Descriptive statistics, Spearman correlation and the Mann–Whitney test were used to analyse the primary data. Findings The study found that most of the SME owners used reactive internal control strategies in setting up their internal control systems after they suffered financial losses occasioned by employees’ fraud. Also, the study found a positive relationship between the number of employees’ fraud and reactive strategy. Finally, the study found a significant difference in the number of employees’ fraud occurrences between proactive and reactive internal control strategies in SMEs. Research limitations/implications The study provides further confirmation that where internal control is properly set up and strengthened, a lower number of employee frauds will occur. Thus, giving credence to the fraud theory. The study was, however, conducted in six selected local government areas in two states. Practical implications The study provides recommendations on the adoption of a proactive strategy for curbing employees’ fraud at the onset of business operations and not until devastating events of employees’ fraud become a reality. Originality/value The study is original, as it focuses on the strategy adopted by SME owners in setting up internal control systems, which is rare in fraud empirical studies, particularly for studies conducted in emerging markets like Nigeria. It provides the need for the sustainability of SMEs as engine of growth and employment through the adoption of appropriate strategies in setting up internal control systems.
{"title":"Internal control systems of SMEs in Nigeria: a proactive or reactive strategy against employees’ fraud?","authors":"B. Ololade","doi":"10.1108/jfc-10-2023-0259","DOIUrl":"https://doi.org/10.1108/jfc-10-2023-0259","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to determine the strategy adopted by small- and medium-scale enterprise (SME) owners in setting up internal control systems, examine the relationship between the numbers of employees’ fraud and strategy adopted in setting up internal control and evaluate the difference between proactive and reactive strategies in employee’s fraud prevention among SMEs.\u0000\u0000\u0000Design/methodology/approach\u0000A survey research approach was adopted to determine whether proactive or reactive strategies were adopted by the SME owners. Specifically, a survey questionnaire was used to gather primary data from selected respondents in Lagos and Oyo States. Descriptive statistics, Spearman correlation and the Mann–Whitney test were used to analyse the primary data.\u0000\u0000\u0000Findings\u0000The study found that most of the SME owners used reactive internal control strategies in setting up their internal control systems after they suffered financial losses occasioned by employees’ fraud. Also, the study found a positive relationship between the number of employees’ fraud and reactive strategy. Finally, the study found a significant difference in the number of employees’ fraud occurrences between proactive and reactive internal control strategies in SMEs.\u0000\u0000\u0000Research limitations/implications\u0000The study provides further confirmation that where internal control is properly set up and strengthened, a lower number of employee frauds will occur. Thus, giving credence to the fraud theory. The study was, however, conducted in six selected local government areas in two states.\u0000\u0000\u0000Practical implications\u0000The study provides recommendations on the adoption of a proactive strategy for curbing employees’ fraud at the onset of business operations and not until devastating events of employees’ fraud become a reality.\u0000\u0000\u0000Originality/value\u0000The study is original, as it focuses on the strategy adopted by SME owners in setting up internal control systems, which is rare in fraud empirical studies, particularly for studies conducted in emerging markets like Nigeria. It provides the need for the sustainability of SMEs as engine of growth and employment through the adoption of appropriate strategies in setting up internal control systems.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":"107 12","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141003719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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