Global Financial Crime Report: Criminals took US$3.1 Trillion in 2023

Published: 30 January 2024

Fraud is Dangerous

Financial crime robbed its victims of an estimated $3.1 trillion worldwide in 2023, a Nasdaq report found. (Photo: Anyumi-, Wikimedia, License)

By Henry Pope

Transnational illicit activities, ranging from romance scams to human trafficking, generated over US$3 trillion in 2023, resulting in the destruction of victims' sense of security and, in some cases, their lives, according to a 2024 Global Financial Crime Report by Nasdaq.

“The world’s multi-trillion-dollar financial crime epidemic is more than a money problem,” said Nasdaq Chair and CEO Adena Friedman. “It has profound human costs from despicable crimes that have a deep and lasting impact on the communities we serve.”

Feeding the pool of trillions in illicit cash flows are veins of other crimes that need their proceeds laundered before use. This includes an estimated $782.9 billion generated by transnational drug trafficking, $346.7 billion from human trafficking, and $485.6 billion across multiple types of fraud, the multinational finance corporation said.

As stated in the report, the total cost of financial crime is difficult to accurately quantify, given how many instances go unreported due to victims feeling a sense of shame or helplessness at their predicament. The $3.1 trillion figure is merely an educated sum of recorded cases, indicating that the true total is significantly higher.

And while such crimes appear to operate outside of our daily lives, the truth is that it is actually the average person who pays the cost; either as a direct victim or through increased business fees and government taxes, which everyone in society must endure to cover what was stolen.

To give a human face to financial crime, Nasdaq’s report includes real world cases of victims of various kinds of fraud, such as a military officer, a Google sales representative, an Ivy League alumnus, and a human trafficking victim. This is to show that any person could one day find themselves in a situation where they are suddenly tens of thousands—if not millions—of dollars in the red and their hopes for the future now lie in ruins.

“People always think it could never happen to them—I know I did, and I’m a former [U.S. Air Force] intelligence officer,” said Debby Montgomery Johnson. “If it can happen to me, it can happen to anyone.”

Amongst the most common, but rapidly growing, kind of fraud likely to be encountered is romance scams, whose victims suffered an estimated $3.8 billion in losses in 2023. Preying upon emotionally vulnerable people too lonely to say ‘no’, victims are asked to give fraudsters posing as the partner of their dreams until they have nothing more to give.

“Losing the money was obviously devastating,” Johnson said after realizing she had been robbed of more than $1 million. “But what’s worse is what it does to your heart, your trust.”

Another significant concern in the U.S. is elder fraud, with the target being lonely, elderly individuals who are persuaded to wire money under false pretenses without the safety net of close family or friends watching over them. Nasdaq reported that, in 2023 alone, one in 10 elderly Americans were targeted for a combined loss of $77.7 billion.

And for every case reported to authorities, the multinational finance corporation said, there are another 23 where the victims stay silent out of shock or shame, thereby giving their abusers a free pass.

Last on the list is human trafficking. Akin to modern slavery, traffickers rob their victims of any autonomy and subject them to indefinite periods of unspeakable abuse for financial gain.

“At any given time, tens of millions of people are coerced into labor or sex work, generating massive profits for their traffickers,” Nasdaq said. With millennia of practice, traffickers have managed to perfect their perverse trade, having generated an estimated $346.7 billion worldwide for themselves in 2023.

To better combat criminals from laundering their trillions in ill-gotten gains, Nasdaq reports that banks are investing more and more in anti-financial crime programs, both “to ensure they meet regulatory obligations” and as a means to “navigating evolving fraud threats” amongst the criminal landscape.

Globally, banks themselves suffered reported losses of $442 billion to payment, cheque, and credit card fraud in 2023, which serves as a personal motivator for them to better recognize and lock down money laundering activity as it tries to filter its way through their institutions.