White Collar Crime: Removing the trust that lets it happen
Last week, the Financial Times reported on the arrest of Ramon Abbas, known online by his handle @Hushpuppi after an international FBI investigation into his illicit wealth.
The influencer was labelled by investigators as one of the most prolific money launderers on Earth and was imprisoned for what is estimated to be $24 million worth of fraud orchestrated by one man. These crimes follow a pattern of global white collar corruption which governments are struggling to tackle in the face of often complex, digitally enabled, financial crimes.
A key cross-cutting attribute which applies to all organised crime is that it requires trust. The ACFE reported in 2022 that the majority of fraud is committed with the collusion of two or more individuals, a practice which requires those individuals to trust one another. From corrupt operational purchasing practices to fraudulent spending of expenses, perpetrators are required to trust one another not to reveal the scheme.
Whistleblowing can stop this, and some US regulators are demonstrating how using whistleblowing programmes.
This trend began with the US Securities and Exchange Commission (SEC) starting their whistleblowing programme in full force in 2012. Since that point they have seen rapid growth in the number of whistleblowers coming to their programme, including internationally from Canada, China, and the UK.
The system works for many reasons. Whistleblowers can, and have, remained anonymous and in some cases continue to work within their given industry even after enforcement action has been taken based on their information. This is because of the skilled investigators that come with properly funded whistleblowing programmes understanding how to conduct these investigations.
Additionally, once credible information has been passed over, the SEC handles the prosecution rather than leaving the whistleblower to take charge. Often whistleblowers remain in contact with the SEC to advise further as the investigation progresses meaning investigators are able to get the clearest picture of the crime, corruption, or cover-up which is ongoing.
A similar system would be possible in the UK, and not just in finance but across sectors. An Office of the Whistleblower offers a lighthouse for people who need to report wrongdoing. When anyone is one conversation away from becoming a whistleblower, it is crucial that everyone is protected and that citizens know their rights.
