Estimating the destination of Mexican-based laundered funds: an application of the modified Walker-Unger model

Abstract

Purpose This study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period. Design/methodology/approach The modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance. Findings Model results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015). Research limitations/implications Timing and availability of reliable data after 2015. Practical implications Aids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity. Social implications May aid policymakers in targeting anti-money laundering policy to more relevant countries. Originality/value The first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

Developing a laundered funds destination theory: applying the Walker–Unger gravity model to US-based money launderer country preference from 2000 to 2020

“…September 11 attacks, global financial crisis and COVID-19). The Walker–Unger gravity model as applied by Roman et al (2021) is used to conduct the investigation. To maintain consistency in the application of the Walker–Unger model and further the objective of validating the attractiveness simulation, this investigation adheres faithfully to the method as used by Roman et al (2021).…”

“…In this investigation, the Walker–Unger gravity model as applied by Roman et al (2021), Ferwerda et al (2020); Wahaj et al (2018), Balani et al (2017); and Ferwerda et al (2013) is used to develop the results. Below is the formula as used by the researchers:…”

“…This paper then compares those results with previous applications of the model and identifies trends, which may serve as the foundations of a money launderer preference theory. The results of the investigation ranked countries by preference of USbased money launderers and determined that there was consistency in country destination preference even during recessionary periods.Design/methodology/approach -The Walker-Unger gravity model as applied by Roman et al (2021) is used to conduct the investigation, to maintain consistency in the application of the Walker-Unger model and further the objective of validating the attractiveness simulation. The model tests the predictive capability of the independent variables to establish the degree of attractiveness each country represents for the funds of US-based money launderers.…”

The Role of Dual Nationality, Financial System Sophistication and Cryptocurrency in Money Laundering

“…All the factors make a country more attractive for laundering, whereas the fifth variable, Egmont Group Member (EG), reduces the Attractiveness of countries for laundering activities. (Roman et al, 2021) and (Roman & Schaefer, 2022) used the Walker 4 model to check the projecting competency of its independent variables. The objective of this study is to explore the role of Dual nationality (DN), financial system sophistication (FSS), and cryptocurrency (CCLS) in money laundering by improving or further updating the Walker model.…”

“…The variables used to compute this dependent variable are the same used as the independent variables in this model. The same variable is used as a dependent variable by (Roman et al, 2021) and (Roman & Schaefer, 2022) to check the predictive capability of the independent variables.…”