On 10 October 2024, FinCEN assessed a $1.3 billion penalty against TD Bank and called it "the largest penalty against a depository institution in U.S. Treasury and FinCEN history" (FinCEN). It also imposed a four year independent monitorship. The bank admitted it willfully failed to keep an AML program that met the Bank Secrecy Act's minimum requirements. The penalty was for the bank's own failures, which is why financial crime law reaches the institution the money passes through as well as the people behind each crime.
What is financial crime, and how do regulators define it?
Regulators list what it covers. The UK's Financial Services and Markets Act 2000 says, in a section written for the FCA's objectives (s1H(3)), that financial crime "includes" offenses of four kinds: fraud or dishonesty, misconduct in or misuse of information about a financial market, handling the proceeds of crime, and terrorist financing. Section 1H(4) counts conduct abroad that would be an offense in the UK. Laundering ties the list together: every other crime leaves proceeds, and the money laundering methods that hide them repeat across types.
The FCA's Financial Crime Guide gives money laundering and terrorist financing, fraud, data security, bribery and corruption, sanctions and insider dealing a chapter each.
The FATF standards cover "money laundering and the financing of terrorism & proliferation". Fincrime, or fin crime, is industry shorthand for the same umbrella.
UK law also lists economic crime: Schedule 11 of the Economic Crime and Corporate Transparency Act 2023 names the offenses, among them cheating the public revenue, conspiracy to defraud, theft and the POCA laundering offenses.
Nobody is charged with "financial crime" as such. A prosecution names fraud, a POCA laundering offense or a Bribery Act offense, so a risk assessment line that says only "financial crime risk" has not yet named the offense, the law or the control that answers it.
What are the main types of financial crime?
Nine types cover most cases, each with one law per jurisdiction, though no overview of them is complete. The EU column cites the predicate offenses in Article 2(1) of Directive (EU) 2018/1673, the crimes whose proceeds can be laundered.
Table 1. Main types of financial crime and the law behind each (as of October 2026; UK column: the law as it applies in England and Wales).
| Type | What it is | US federal law | UK law | EU (Directive 2018/1673) |
|---|---|---|---|---|
| Fraud | Deception for gain | 18 U.S.C. 1343, wire fraud | Fraud Act 2006 s1 (also Northern Ireland) | Art 2(1)(i) |
| Money laundering | Handling or hiding criminal proceeds | 18 U.S.C. 1956 | POCA 2002 ss327 to 329 | Art 3 |
| Terrorist financing | Raising or moving money for terrorism, clean or dirty | 18 U.S.C. 2339C | Terrorism Act 2000 ss15 to 18 | Art 2(1)(b), terrorism |
| Bribery and corruption | Offering or taking an advantage to sway a decision | Foreign Corrupt Practices Act | Bribery Act 2010 | Art 2(1)(h) |
| Sanctions evasion | Dealing with a designated person or breaking a trade ban | 50 U.S.C. 1705, IEEPA penalties | Regulations under SAMLA 2018, regime by regime | Directive (EU) 2024/1226, Art 3 |
| Tax evasion | Cheating the state of tax | 26 U.S.C. 7201 | Cheating the public revenue (common law); VAT Act 1994 s72 | Art 2(1)(q) |
| Market abuse | Insider dealing and market manipulation | 15 U.S.C. 78j | Criminal Justice Act 1993 s52 | Art 2(1)(u) |
| Embezzlement and theft | Taking money one controls or does not own | 18 U.S.C. 641, public money | Theft Act 1968 s1 | Art 2(1)(o) |
| Cybercrime | Attacks on computers and data for gain | 18 U.S.C. 1030 | Computer Misuse Act 1990 s1 | Art 2(1)(v) |
For the sanctions row, Directive (EU) 2024/1226 sets minimum rules that make breaking EU restrictive measures a criminal offense, with national law due by 20 May 2025. In the UK, OFSI, part of HM Treasury, helps enforce financial sanctions; in the US, OFAC does. Scotland keeps common law fraud, embezzlement and theft, which Schedule 11 lists on their own, so the UK column is not the whole UK.
Is fraud a financial crime, and where does money laundering fit?
Yes. Fraud is the first limb of FSMA s1H(3), "fraud or dishonesty", and money laundering sits in the third, "handling the proceeds of crime".
Picture an invoice fraud (illustrative). The fake invoice and the payment it wins are fraud; moving that money onward through other people's accounts is money laundering. The bank that pays out may see only the second half.
Who commits financial crime?
On 26 February 2025 the FBI said North Korea had stolen about $1.5 billion in virtual assets from the Bybit exchange five days earlier, through actors it calls TraderTraitor, and expected the assets to be laundered (FBI). A state can be the offender. So can:
- Individuals, from a borrower lying on a loan form to an employee with access to client money.
- Organized groups, which recruit money mules to move proceeds through ordinary accounts.
- Officials who loot public money, the extreme being kleptocracy.
- Professional enablers, such as lawyers, accountants and company formation agents. A company commits an offense when a person associated with it facilitates UK tax evasion, unless its prevention procedures were reasonable (Criminal Finances Act 2017 s45).
- The firm itself. A large organization commits an offense when an associate commits fraud to benefit it, unless its prevention procedures were reasonable (ECCTA 2023 s199, since 1 September 2025). Since 29 June 2026 a company or partnership also commits any offense its senior manager commits within the actual or apparent scope of their authority (Crime and Policing Act 2026 s250).
How large is financial crime, and how does it affect the economy and society?
By the numbers, UNODC puts the money laundered in a year at 2 to 5 percent of global GDP, or $800 billion to $2 trillion (UNODC). Its page gives no year. The range is old: the IMF's managing director said 2 to 5 percent "would probably be a consensus range" in an address to the FATF on 10 February 1998 (IMF).
UNODC's own 2011 study put the money available for laundering at about 2.7 percent of global GDP, or $1.6 trillion, in 2009. It found that "less than 1% (probably around 0.2%)" of the criminal proceeds laundered through the financial system are seized and frozen (UNODC, 2011). The harm reaches the economy and society as a whole. The 1998 address warned that "markets and even smaller economies can be corrupted and destabilized".
What changed in 2026
- 29 June 2026. That senior manager rule took effect; the narrower ECCTA rule, for economic crimes only, was repealed the same day.
- 13 October 2026. FinCEN assessed a $1.2 billion penalty against Bank of America for failing to mitigate and report priority national security risks; the OCC added $750 million and OFAC an $11.6 million settlement.
- 2027 and 2028. During 2027 AMLA, the EU's AML authority, chooses the 40 obliged entities it will supervise itself; that supervision begins during 2028.
How is financial crime prevented inside a firm?
For fighting financial crime, the FCA's guide lists questions a firm should ask itself, among them "What are the main financial crime risks to the business?" and "When did the firm last update its risk assessment?" (FCG 2.2.4). Seven controls answer them:
- Risk assessment. Products, customers, countries and channels, reviewed on a set date.
- Governance. Senior management takes clear responsibility for financial crime risk management, as FCG 2.2.1 expects.
- Customer due diligence. Identity, ownership and purpose at onboarding, with enhanced due diligence for PEPs and other higher risk customers.
- Screening. Names checked against the OFAC, UK, EU and UN sanctions lists at onboarding and after every list update.
- Monitoring. Payments watched for fraud and laundering patterns together. In complead, formerly Sanction Scanner, fraud and AML on one platform means both teams assess the same customer data and events and examine one record before they decide.
- Reporting and investigation. A suspicion goes to the financial intelligence unit after an investigation the file can show.
- Fraud prevention procedures. Since 1 September 2025 they are a large organization's defense to the UK offense of failing to prevent fraud.
Every row of Table 1 leads to the same next question: How are the proceeds of these crimes made to look clean?
Related terms
- Fraud vs money laundering. How deception for gain differs from hiding what it earned.
- Financial fraud. Fraud aimed at money, accounts, payments or markets.
- Corruption. Abuse of entrusted power for private gain.
- Money mule. A person whose account moves criminal money for others.
- Anti money laundering. The laws and controls that keep criminal proceeds out of the financial system.
- Kleptocracy. Rule by those who steal from the state.
How this entry was checked
This entry is by Barbaros Sercan, Customer Success Specialist, and Javid Khasayev, Senior Anti-Fraud Specialist at GoldenPay, does its compliance review. Last reviewed: 28 October 2026. The sources were checked on 27 October 2026: FSMA 2000 section 1H, the FCA Financial Crime Guide, the Economic Crime and Corporate Transparency Act 2023 (section 199, Schedule 11), the Criminal Finances Act 2017 section 45, the Crime and Policing Act 2026 section 250, the FATF Recommendations (June 2026), Directives (EU) 2018/1673 and 2024/1226, the US Code sections in Table 1, FinCEN's TD Bank and Bank of America releases, the FBI's Bybit notice, UNODC (overview and 2011 study), the IMF's 1998 address and AMLA. The definition follows FSMA section 1H(3) and the FATF's scope.
