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Money Laundering and Financial Crime Investigators

A Master of Legal Studies degree can build a stronger understanding of the legal and regulatory side of financial crimes and the expertise to become a financial crime investigator.
Money Laundering and Financial Crime Investigators

By Miami Law Staff Report

Every year, millions of Americans fall victim to scams, schemes, and financial crimes that strip away their hard-earned money and peace of mind. According to the Federal Trade Commission (FTC), consumer losses caused by fraud cost hard-working Americans more than $12.5 billion in 2024 — and that's without even taking into account other types of financial crime, such as money laundering and embezzlement.

If you're interested in making a career out of preventing and analyzing these types of crimes, working as a financial crime investigator might be the right path for you.

What Is Financial Crime and Money Laundering?

Financial crime is an umbrella term for any illegal activity that involves the unlawful acquisition of money or other financial assets. Among the most common in the United States is money laundering.

The Financial Crimes Enforcement Network defines money laundering as "disguising financial assets so they can be used without detection of the illegal activity that produced them." This may happen, for example, when a drug trafficker uses a business as a "front" for hiding illegal money. 

Unfortunately, money laundering and other types of financial crime can have devastating consequences, both economically and socially.

Common Types of Financial Crimes in the United States

It goes without saying that money laundering isn't the only financial crime often carried out in the United States. Other common examples of "white-collar crime" include:

  • Embezzlement - This involves the misappropriation of funds or assets for a person's personal gain. For instance, an employee may use a company credit card to pay for personal items unrelated to the business.
  • Insider trading - Insider trading refers to the buying or selling of securities based on information that is not available to the public. This may occur when a shareholder gets insider information about an upcoming merger and decides to buy or sell shares as a result.
  • Bribery - Bribery involves coercing someone to do something (or not do something) by using an offer of money or other benefits.
  • Fraud - This is the act of deceiving others for financial gain, such as when somebody uses another person's credit card information to make high-end purchases.

How Money Laundering Works: Typical Stages and Methods

Generally, the end goal of money laundering is to disguise the manner in which the funds were obtained, allowing the money to be used freely in the market. Although no two situations are exactly alike, the money laundering process is typically broken into three key stages.

  1. Placement- A large sum of illegally obtained cash is moved into the economy. This may be done in any number of ways, such as by adding the cash to a "front" company's daily revenue or even depositing money into offshore bank accounts.
  2. Layering - Once money has been placed, it may be moved around through multiple bank accounts, companies, or other investments as a means of disguising its origins and making it more difficult to track.
  3. Integration - Now that the illegal money trail has been covered up as much as possible, criminals may begin spending the money. Oftentimes, criminals will use laundered money to buy high-value assets and real estate. They may also use it to invest in businesses or other ventures.

The Role of Financial Crime Investigators

Financial crimes can have a serious impact on the economy — and, in some cases, they can even be used to carry out far more serious crimes. Money may be laundered, for example, to fund terrorist organizations or other groups that may pose a very real threat to Americans.

The prevalence of financial crime in the United States is exactly why we need experienced and skilled financial crime investigators to pinpoint, prevent, and prosecute instances of money laundering, fraud, embezzlement, and other crimes.

Key Responsibilities and Daily Tasks

The specific duties and responsibilities of a financial crime investigator may vary slightly from one role to the next. In general, however, these professionals are responsible for:

  • Analyzing and examining financial documents for signs of illegal activity.
  • Gathering evidence and building cases, where applicable, to demonstrate that a financial crime has been committed.
  • Working with law enforcement, lawyers, and other parties to build strong cases.
  • Providing expert testimony in court cases.

Essential Skills and Qualities for Investigators

Financial crime investigators need to have strong critical thinking skills, particularly when it comes to conducting thorough financial investigations and keeping an eye out for signs of illegal activity. A strong attention to detail can go a long way for a financial investigator, as authorities typically investigate and detect money laundering activities by analyzing transaction records, monitoring unusual patterns, reviewing financial statements, and following audit trails in the legitimate financial system. Investigators utilize specialized software and financial intelligence to collaborate with banks and regulatory bodies to identify suspicious activities and uncover hidden assets.

Because there are many regulations in place governing the world of finance, these investigators also need to have a solid understanding of relevant laws (including anti-money laundering laws) and forensic accounting techniques.

Pathways to Becoming a Financial Crime Investigator

Interested in making a difference by investigating and preventing financial crime? Let's examine what it takes to break into this exciting field.

Required Education and Certifications

Typically, financial crime investigators need to have a minimum of a bachelor's degree in accounting, finance, forensic accounting, criminal justice, or a related field. In addition to an undergraduate degree, a Master of Legal Studies degree can help candidates differentiate themselves while building a stronger understanding of the legal and regulatory side of financial crimes.

Additional certifications, such as Certified Anti-Money Laundering Specialist (CAMS) or Certified Fraud Examiner (CFE), may also be preferred by some employers.

Gaining Relevant Experience and Networking Opportunities

Professional experience in certain areas of finance, including auditing and forensic accounting, can be especially relevant when pursuing a role as a financial crime investigator. However, it's also about who you know, so having a robust professional network could give you an advantage over other candidates. A degree program is a great way to build valuable, lifelong connections.

Financial institutions play a crucial role in preventing money laundering by implementing compliance measures, monitoring transactions for suspicious activities, and adhering to internal risk management measures while reporting potential cases to regulatory authorities and considering obligations under the Proceeds of Crime Act. Experience with these processes, particularly from within financial institutions, can provide valuable insight and skills for those seeking to work in financial crime investigation.

Learn the Ins and Outs in an M.L.S. Degree Program

If you already have your undergraduate degree and are looking to enhance your understanding of the legal side of investigating financial crimes, it may be time to pursue your online Master of Legal Studies from the University of Miami School of Law. Specifically, our Wealth Management and Financial Services track can help you sharpen your knowledge and prepare for a rewarding career. Get in touch to learn more or start your application today!

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