The Economic and National Security Implications of Money Laundering and Fraud in the US
DOI:
https://doi.org/10.47941/ijppa.2637Keywords:
Money Laundering, Fraud, Financial Crime, National Security, Economic Disruption, Anti-Money Laundering (AML)Abstract
Purpose: Money laundering and fraud are pervasive financial crimes that pose significant threats to both economic stability and national security. This paper explores the multifaceted impacts of these crimes within the United States by assessing how illicit financial flows distort market operations, undermine public institutions, and enable criminal and terrorist networks.
Methodology: Drawing upon qualitative data from scholarly research, government reports, and real-world case studies, the study illustrates how money laundering inflates asset prices, misallocates capital, and distorts investor risk perceptions thereby reducing economic efficiency and hindering long-term growth.
Findings: Fraud, particularly corporate and cyber-enabled, is further shown to erode trust in financial institutions, increase compliance costs, and exacerbate social inequality. National security threats arise when laundered funds are used to finance organized crime, terrorism, and espionage. The growing role of digital currencies adds complexity by providing anonymity and bypassing traditional financial oversight.
Unique Contribution to Theory, Policy and Practice: The paper offers a comprehensive analysis of current policy responses, identifies gaps in enforcement, and proposes targeted recommendations to strengthen regulatory frameworks and foster international cooperation. Innovative solutions such as blockchain analytics, AI-based detection tools, and whistleblower protections are highlighted as critical to curbing these crimes. The paper concludes that combating financial crimes requires a multidimensional strategy involving legal, technological, institutional, and cross-border collaboration. By addressing the root causes and systemic enablers of money laundering and fraud, the United States can enhance its financial integrity, safeguard national security, and promote sustainable economic growth.
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