In the face of increasingly sophisticated financial crimes, traditional asset tracing and recovery methods are constantly being outsmarted.
In this battle, it’s fire for fire.
Criminals are leveraging advanced technologies like Artificial Intelligence (AI) and Generative AI (Gen AI) to forge intricate synthetic identities and obscure their financial trails. These technologies are readily accessible, require minimal training, and enable fraud on a massive scale at a low cost.
To counter this, investigators must harness AI themselves to effectively combat AI-powered fraud. AI and Gen AI hold significant promise for revolutionizing asset tracing, recovery, and management. By using AI, investigators can dissect complex financial transactions and uncover connections between individuals and entities involved in fraud.
Hence, in this article, we’ll discuss how investigators can harness AI to track and reclaim stolen assets. Plus, it previews an upcoming AI Training Summit for financial investigators in the USA.
Let’s dive in!
Asset Recovery
As of 2023, the global financial system became a channel for the flow of about $3.1 trillion in illicit funds and about $500 billion in fraudulent activities. The rise of cryptocurrencies introduces even more hurdles in curbing these illicit flows.
Criminals managed to launder $22.2 billion worth of crypto in 2023, highlighting the growing complexity of digital financial crimes.
Moreover, in one of many cases where fraudsters misused government schemes, the U.S. Department of Justice revealed Paradise Williams in Washington had stolen over $6.8 million from pandemic relief, using taxpayers’ money on luxury cars, lavish trips, and cosmetic surgery.
While fraudsters are swindling billions of dollars, fraud investigators are struggling with backlogs due to outdated technology. Facing persistent money laundering, fraud investigators can confront these challenges by pivoting towards AI for asset recovery—a new hope in the fight against financial crime.
Here’s how AI applications can help financial investigators recover laundered assets by:
- Pattern Recognition: AI algorithms excel at detecting relationships and anomalies in transactional data, identifying patterns that may indicate fraudulent activities. This capability is crucial for flagging potential issues early in the investigation process.
- Network Analysis: Utilizing graph algorithms, AI can map out complex networks of financial transactions, revealing the hidden connections between accounts and entities. This insight is invaluable for tracing the movement of illicit funds and identifying the individuals involved.
- Predictive Analysis: AI’s predictive analytics can examine historical data and use it to forecast future asset-hiding attempts, allowing investigators to stay one step ahead of fraudsters. This proactive approach significantly enhances the chances of recovering assets.
- Natural Language Processing (NLP): AI leverages NLP to sift through unstructured data, such as legal documents, contracts, and communication records. They extract crucial information that can lead financial investigators to the recovery of hidden assets.
- Deep Learning Modeling: Deep learning models can recognize complex patterns in pictures, text, and other data to produce accurate predictions. These models can put together missing pieces and predict images, especially in situations where the investigator is unaware of what the original picture looks like.
AI applications are not only limited to tracking and seizing asset movements during illicit activities. After seizing assets from money launderers, it is imperative to handle and redistribute them correctly. This is where AI tools come in once again, aiding financial investigators to also effectively manage proceeds from fraud, as detailed in our preceding section.
Asset Management
As INTERPOL Secretary General Jürgen Stock said: “…By ambitiously pursuing every solution, every piece of actionable data, we will bring these illicit flows out of the dark and back to the legitimate economy.”
Every transformative solution and tool is crucial to make this endeavor successful, continue reading to learn more about how AI can assist financial investigators trace, recover, and efficiently manage proceeds recovered from financial crimes.
How AI Can Assist in Asset Management
The traditional asset management system has proven effective over the past few years but let’s dig into how AI can revolutionize the entire process to help financial investigators and agencies to manage recovered assets better.
- Valuation and Liquidation: AI can assist in accurately valuing recovered assets by analyzing market data, historical prices, and condition reports, ensuring assets are sold for their maximum value. AI and machine learning algorithms can also identify the best times and methods to sell off assets.
- Transparent Decision-making: AI algorithms can provide transparency into the decision-making process for asset redistribution. This allows anti-fraud professionals to understand how recovered assets will be allocated and ensures accountability in the distribution process.
- Efficiency in Restitution: Machine learning models can automate the matching of assets to victims based on the specifics of the crime and the losses incurred. This speeds up the restitution process, ensuring victims are compensated early.
- Regulatory Compliance: AI streamlines regulatory compliance efforts by ensuring that management and disposition of assets are free from biases and align with ethical norms. These tools can monitor changes in legal frameworks and adjust asset management practices.
To go deeper into the impact of AI on asset tracing, recovery, and management, register and attend the ScanWriter’s AI Training Summit; find out more details below.
2024 AI Training Summit: Advancing Asset Recovery and Management with AI
While there is no doubt about the transformative potential of AI in financial fraud investigations, yet the Department of Treasury flags a notable skills gap in AI within law enforcement, including fraud units.
But the good news is: Policymakers, academics, and AI innovators are joining forces to bridge this skills gap. They’re rolling out training, webinars, conferences, and online courses tailored for financial investigators.
And here’s a spotlight event: One of the most sought-after AI summits of the year, the AI Training Summit by ScanWriter, is set for May 15-16, 2024. This summit is a prime opportunity for anti-fraud professionals from federal, state, and local agencies to network and explore advanced AI tools designed to unearth sophisticated fraud schemes.
Let us also assure you that this exclusive event at the National Press Club in Washington, DC, promises a hands-on visual walkthrough of AI’s power in detecting and managing assets from financial crimes. Perfect for financial investigators eager to stay ahead in the dynamic world of fraud investigation.
Seats are filling fast! Register now to unlock the future of financial investigations.