Financial crime is any illegal activity involving money, finance or financial systems committed to secure personal or organizational gain. It includes crimes committed against property, involving the unlawful conversion of the ownership of property to one's own personal use and benefit. Financial crime covers a wide spectrum of illicit acts.
Financial crimes may involve fraud (cheque fraud, credit card fraud, mortgage fraud, medical fraud, corporate fraud, securities fraud, bank fraud, insider trading, insurance fraud, market manipulation, payment (point of sale) fraud, health care fraud); scams or confidence tricks; tax evasion; bribery; embezzlement; extortion and blackmail; identity theft; money laundering and terrorist financing; and forgery and counterfeiting, including the production of counterfeit money and consumer goods. Financial crimes may be carried out by individuals, corporations, or by organized crime groups. Victims may include individuals, corporations, governments, and entire economies.
Financial crimes may also involve additional criminal acts, such as computer crime and elder abuse and even violent crimes including robbery, armed robbery or murder.
Law enforcement often classifies larger forms of financial collusion as criminal syndicates.
Fraud Fraud involves intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Some of the main categories of fraud include:
Identity theft: Stealing someone's personal data to commit crimes, open accounts, purchase goods and services or take out loans. Cyber and online fraud: Crimes utilizing the internet, including phishing, hacking and ransomware attacks to steal funds or data; mule accounts to launder money; crypto and investment scams used to steal digital assets. Corporate and securities fraud: Intentional misrepresentation of financial statements or investment scams like Ponzi and pyramid schemes to deceive investors; market manipulation; insider theft of proprietary data or information for personal gain. Insurance, public sector and healthcare fraud: Filing false claims or inflating damages to wrongfully collect insurance, welfare payouts, or healthcare payments. Banking and credit card fraud: Unauthorized use of cards, check forgery or application fraud to steal from financial institutions or individuals.
In 2005, fraud within the financial industry was estimated to cost the UK £14 billion a year. In 2025, the UK Home Office estimated the economic and social cost of fraud in 2023–2024 against individuals and businesses to be in excess of £14 billion. This consists of £9 billion affecting individuals and over £5 billion affecting businesses.
With the increases in digital transaction volumes, fraud and cybersecurity have become increasingly intertwined. Fraud and financial crime patterns have become more digital and faster changing, leveraging the underlying characteristics of the underlying digital payments infrastructures. This makes traditional rule based systems less effective and has encouraged greater use of machine learning and AI-based fraud detection techniques.
Powered by emerging generative AI capabilities and technical investments, criminal organizations have also ramped up their capability to commit financial crimes and fraud in recent years. An Interpol director recently summarized the challenges as: "We are facing an epidemic in the growth of financial fraud, leading to individuals, often vulnerable people, and companies being defrauded on a massive and global scale."
Corruption, Bribery and Extortion Corruption is the abuse of entrusted power of authority for personal or private gain. It involves dishonest, illegal or unethical behaviour by individuals in power, such as politicians, public officials or business executives, who exploit their position for unfair advantage. Common forms of corruption include bribery, embezzlement and extortion.
Bribery is defined generally as corrupt solicitation, acceptance or transfer of value in exchange for official action. It refers to the offering, giving, soliciting or receiving of any item of value as means of influencing the actions of an individual holding a public or legal duty. Solicitation of a bribe also constitutes a crime. The U.S. introduced the Foreign Corrupt Practices Act in 1977 to address bribery of foreign officials. This legislation dominated international anti-corruption enforcement until around 2010 when other countries began introducing broader and more robust legislation, notably the United Kingdom Bribery Act 2010. The International Organization for Standardization introduced an international anti-bribery management system standard in 2016. In recent years, cooperation in enforcement action between countries has increased. In 2016, Grupo Odebrecht, one of the largest construction firms in Latin America, made a settlement of $2.6 billion with authorities in the US and Switzerland, after executives confessed to paying bribes for contracts in Brazil and more than 10 other countries.
Embezzlement occurs where an individual misappropriates money, property or assets that have been lawfully entrusted to their care. It is a breach of trust, where the offender has legitimate, lawful access to assets, due to their job, role or relationship but chooses to misuse that authority for personal gain. In June 2026, Peter Murrell, former Chief Executive of the Scottish National Party and estranged husband of the former First Minister of Scotland, Nicola Sturgeon, was sentenced to five years in prison for embezzling more than £400,000 from the SNP.
Extortion is the wrongful use of actual or threatened force, violence or intimidation to gain money or property from an individual or entity. It generally involves a threat being made to the victim's personal property or to their family and friends. While the threat of violence or property damage is commonplace, it can also involve reputational harm. The main forms include blackmail, protection rackets and cyber extortion, including ransomware. In recent years, the rapid proliferation of technology has facilitated forms of cyber extortion that typically involve the use of malicious software that restricts access to IT systems until payment demands are met. Blackmail is a form of extortion in which, rather than physical harm, the threat is the exposure of damaging information related to the victim. In 2025, three individuals were convicted of a plot to extort €15 million from the family of former Formula 1 champion Michael Schuhmacher. They had threatened to cause reputational harm by publishing defamatory material on the dark web.
Market Abuse and Financial Manipulation Market Abuse occurs when a person or group of people act to disadvantage other investors in financial markets. It involves illegal practices that undermine market integrity, distort asset pricing and disadvantage unsuspecting investors. There are three main types of Market Abuse: Insider Dealing; Market Manipulation; and Unlawful Disclosure. In the UK, for example, these offences are heavily regulated by the Financial Conduct Authority (FCA) under the UK Market Abuse Regulation (UK MAR) and the Financial Services and Markets Act (FSMA).
Insider Dealing arises where a person uses inside information to conduct a transaction in a financial instrument to which that inside information relates. Inside information is of a precise nature, it is not public, it relates to an issuer or issuers of financial instruments, and if it is made public would have a significant effect on prices. In 2012, Matthew Kluger, a lawyer who had worked at some of the most prestigious law firms in the US, was sentenced to a record 12 years in prison for running a $37 million insider trading scheme over a period of 17 years.
Market Manipulation occurs when someone artificially affects the supply or demand for a security, for example causing prices to rise or fall. It may involve techniques such as spreading false or misleading information about a company; engaging in a series of transactions to make a security appear more actively traded; and, rigging quotes, prices or trades to make it look like there is more or less demand for security than is the case. In 2021, the French Autorité des Marchés Financiers (AMF) fined Amundi Asset Management and Amundi Intermediation a total of €32 million. They were found guilty of price manipulation and wash trading, particularly in Euro Stoxx 50 futures. Two former employees were banned for ten years from market activity.
Unlawful Disclosure of inside information arises where a person possesses insider information and discloses that information to any other person, except where the disclosure is made in the normal exercise of employment, a profession or duties. In 2022, the British FCA fined Sir Christopher Gent, former non-executive chair of ConvaTech Group, £80,000 for unlawfully disclosing inside information. The disclosures concerned an expected announcement by ConvaTech related to a revision of financial guidance and the CEO's plans for retirement.
Money Laundering and Terrorist Financing
For most countries, money laundering and terrorist financing raise significant issues with regard to prevention, detection and prosecution. Sophisticated techniques used to launder money and finance terrorism add to the complexity of these issues. Such sophisticated techniques may involve different types of financial institutions; multiple financial transactions; the use of intermediaries, such as financial advisers, accountants, shell corporations and other service providers; transfers to, through, and from different countries; and the use of different financial instruments and other kinds of value-storing assets. Money laundering is, however, a fundamentally simple concept. It is the process by which proceeds from a criminal activity are disguised to conceal their true origin. Basically, money laundering involves the proceeds of criminally derived property rather than the property itself. Money laundering can be defined in a number of ways, most countries subscribe to the definition adopted by the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) (Vienna Convention) and the United Nations Convention Against Transnational Organized Crime (2000) (Palermo Convention):
The Financial Action Task Force on Money Laundering (FATF), which is recognized as the international standard setter for Anti-money Laundering (AML) efforts, defines the term "money laundering" briefly as "the processing of criminal proceeds to disguise their illegal origin" in order to "legitimize" the ill-gotten gains of crime.
In 2005, money laundering within the financial industry in the UK was believed to amount to £25bn a year. In 2009, a United Nations Office on Drugs and Crime (UNODC) study estimated that criminal proceeds amounted to 3.6% of global GDP, with 2.7% (or $1.6 trillion) being laundered. In 2026, this baseline percentage continues to be the basis of global UN estimates and equates to $800 billion to $2 trillion.
Underlying illegal offences generate illicit funds that are subsequently laundered. In the European Union, there are 22 categories of such crimes, including: arms trafficking; bribery; corruption; counterfeiting; cybercrime; drug trafficking; environmental crime; extortion; financing of terrorism; forgery; fraud; human trafficking; insider trading; racketeering; sexual exploitation; tax evasion and theft.