This article is part of Kyckr’s new Future of Financial Crime Series which will feature interviews with leading industry professionals and thought leaders to learn more about the trends that will shape the future of financial crime.
The following is an interview we recently had with Robert Katzberg, Consulting Counsel for Holland & Knight.
How has financial crime evolved over the past 5 years?
Financial crime today is much more rampant than generally known. The lack of international treaty enforcement, a serious understaffing at the IRS and outdated enforcement laws, rules and regulations has combined to allow financial crimes to flourish. While there are abundant aspects of the overall problem, the ability of multinational corporations to move income from high tax jurisdictions to low tax nations, by itself, is estimated to cost the U.S. some 50 billion dollars a year. The problem as to undeclared offshore accounts utilised by individual US taxpayers continues despite the UBS scandal and its follow up via the DOJ Swiss Bank Program. New tax havens in the Far East have drawn undeclared U.S. taxpayer money from Switzerland, and China’s authority over Hong Kong banking will preserve this important safety outlet for financial crime for the foreseeable future.
What is the state of financial crime today?
Financial crime has become more difficult to detect with the rise of crypto currencies like Bitcoin. Despite its self-serving public relations, the main benefit of such currencies is the ability to hide financial transactions and assets.
Of course, this is a benefit desired almost exclusively by persons and entities seeking to violate the law, without which law enforcement has the ability to “follow the money” and hold wrongdoers accountable.
What’s the future of financial crime?
A better functioning future should necessarily include: updating financial systems throughout the world to make KYC standards high and uniform; enacting stricter international treaties to better follow and supervise financial activities, and allow greater international transparency; enacting and enforcing controls over crypto currencies (if not an outright ban); and passing federal statutes similar to New York’s Martin Act to allow a broader sweep of law enforcement capabilities in prosecuting criminal activity in the world of finance.
