The laws of unintended consequences | AML data mining
While the data collected by governments was intended to capture Anti Money Laundering and terrorists, it is providing many other results, including the recent debacle with Elliott Spitzer.
globeandmail.com: Anti-laundering software casts wide net to catch big fish
The software looks for subtle patterns that indicate odd activity, and when a transaction is flagged, a human evaluates the findings. More often than not, the anomaly is explained and dismissed. For example, someone whose banking consists of bi-weekly deposits may suddenly show an influx of $15,000 that turns out to be profit from the sale of a car.
But when investigators do find something — like chunks of money transferred from the account of a state governor into the account of a shell corporation — they flag the information and forward it to the authorities. In the United States, the U.S. Treasury’s Financial Crimes Enforcement Network looks at almost five million suspicious activity reports a year. In this country, The Financial Transactions and Reports Analysis Centre of Canada in 2007 investigated 193 cases involving close to $10-billion in financial transactions.
