How Does Money Launderer’s Psychological Analysis Shape Effective AML Program?

For a financial crime to occur, there has to be means, motive, and opportunity. It’s more than just greed or desperation.

Money laundering is a psychological game where blurred ethics and thirst for deception twist rationality in a way that emerges in the form of the biggest financial crimes in history.

Let’s step inside the mind of a money launderer, and uncover the silent battles, twisted rationales, and hidden calculations that fuel one of the most covert crimes in finance.

What’s the Psychological Profile of Financial Criminals?

Before you get into exploring the intricacies of what instigates a money laundering attempt, different types of people found to be involved in money laundering, here are the top 4 categories they could align with:

1. The Opportunistic Insider

As the name suggests, people with a combination of insider knowledge and the belief they are too smart to not get caught often fall under this category.

As it’s said “ Pride hath a fall” These types of criminals often consider themselves as simply “gaming” an already flawed system without being caught.

The recent case of Alice Guo is a prominent example of criminal typology that falls under this category.

Guo’s corrupt typology aligns with the opportunistic insider, someone who blends business savvy with ethical flexibility. Her use of legitimate businesses to facilitate money laundering indicates a willingness to exploit professional knowledge for personal gain.

The individuals who fall under this profile often rationalize their actions as strategic or a “cost of doing business,” viewing laundering as an extension of business practices rather than a crime.

This tendency to prioritize opportunity over legality points to a moral detachment, where the focus remains on financial gains rather than ethical considerations.

This brings us to our next type of money launderer profile, which is guided by the thrill and excitement

2. The Thrill Seeker

As the name suggests, such types of criminal profiles include people with high risk and pressure tolerance while being big enthusiasts for manipulating systems and outweighing authority.

Such criminal profiles are often charismatic as they see the art of money laundering as an adrenaline-fueled challenge, where reward and risk go hand in hand.

The recent case study of Ruslan Goryukhin and Mikhail Opengeym is the perfect visualization of the risk-taker criminal profile.

Two Russian nationals were implicated in international money laundering schemes that utilized complex financial networks and cryptocurrency. Known for their high-risk ventures, they exploited global financial loopholes, involving high-tech strategies in their operations.

Goryukhin and Opengeym fit this type of profile, characterized by their love for challenge depicted through their long trail of financial crime history. They perceive financial crime as a space to test creative limits.

Their use of cryptocurrency for laundering highlights a forward-thinking mindset that embraces new technologies, while a desire to outmaneuver authorities suggests a competitive, almost game-like approach to financial crime.

3. Narcissistic Manipulator

Directors, CEOs, and executives, sitting at the peak of their organizations, tend to have a massive influence not just on the livelihoods of employees but also on the ethical compass of the company itself.

Decisions made in the shadowy corridors of power can result in scandals, fraud, or the prioritization of profits over people.

With an inflated sense of self-worth and entitlement, people belonging to this criminal profile are mainly business executives who perceive themselves as highly confident and label themselves above the law.

While such personality types might consider them to abide by normal ethical standards but also undermine their observance by believing their skills/ status allow them to cut corners.

4. The Calculative Strategist

A calculative strategist is a criminal profile of an individual who does illicit crimes for personal gains and is often related to gaining power or financial gains. These individuals possess a high level of precision and strategic thinking.

These individuals often exhibit traits that allow them to manipulate situations, systems, and people to their advantage, ensuring minimal risk of detection.

How Could You Identify This Criminal Profile?

Such individuals possess high intelligence, low emotional involvement, and often lack empathy.

Gerry Hutch’s preference for anonymity and operational control reflects a pragmatic approach to financial crime, where risk mitigation and caution are prioritized over high-stakes thrill-seeking.

Does Cognitive Dissonance Blur Ethical Lines?

Cognitive Dissonance is the uncomfortable feeling and discomfort that occurs in response to conflicting beliefs and actions among criminals.

Money launderers often justify their actions by developing a self-perception of “ goodness” and “justified actions”. In the context of white-collar crimes, money launderers often claim their illicit acts as part of “only borrowing” money or “compensation” for their act or service.

This unethical rationalization deprives them of the guilt that may result after being caught, thus continuing to do the same without any intention to improve or remorse.

How Do Crimes Become Normalized?

Many times, repeated exposure to unethical behavior without any immediate repercussions or consequences desensitizes people, making their actions look acceptable to them. This process not only reduces internal conflict but also reinforces a pattern of misconduct.

Is There Any Science Behind This?

Definitely yes!  The dopaminergic system, particularly the ventral striatum, becomes highly active during risky decisions, such as financial fraud or high-stakes gambling. The anticipation of reward triggers dopamine release, creating a sense of euphoria. This chemical boost reinforces risk-taking, making the behavior addictive over time and thus continues to be a long-term practice.

Shape Effective AML Program with Psychological Analysis

Understanding psychological profiles and drivers behind money laundering not only helps in analyzing why money laundering happens but also equips MLROs or compliance officers in shaping AML compliance strategies to counter it.

AML Watcher recently launched PEP Talk, with its first episode touching the psychological drivers behind money laundering, promoting the role of understanding psychology in bridging the gap between managing consequence-free money and the right framework to hold people accountable.