In recent news, criminal gangs in Sweden have been making headlines for an unexpected reason: they’ve been using fake Spotify streams to launder their ill-gotten gains. This revelation has shed light on a rather unconventional avenue for money laundering, one that connects the world of music streaming with organized crime. Before we delve into the specifics of this unexpected connection, let’s establish some context. New Zealand, like many other nations, has stringent regulations in place to combat money laundering and the financing of terrorism. The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act forms the backbone of these efforts, dedicated to ensuring compliance with these regulations.
The Swedish Saga: Imagine this: Criminal gangs causing chaos in Sweden have been channeling their ill-gotten gains into the music industry. Yes, you heard that right. These gangs, involved in everything from drug deals to robberies, have taken a bizarre detour into the world of music streaming.
Here’s how it goes down: They pay for fake Spotify streams of songs by artists linked to their criminal activities. It’s a crafty move, making them look like legit streamers. This lets them clean their dirty money on a platform that, at first glance, seems light years away from their shady dealings.
Even more intriguing is that gang members have spilled the beans on this. One anonymous gangster admitted, “I can say with 100% certainty that this goes on. I’ve been part of it myself.”
And the timing? Well, it’s impeccable. It coincided with the rise of Swedish gangster rap’s popularity, earning it music awards. Gangs realized the potential of the music streaming industry for their financial gains.
Here’s how it works: Criminal groups convert their “dirty” cash into bitcoin for anonymity. Then, they use this cryptocurrency to pay individuals who sell fake streams on Spotify. This helps them pump up the stream numbers for their chosen tracks, effectively laundering their money through an unsuspecting channel.
The result? They get financial anonymity and bigger payouts from Spotify due to the boosted streams. In Sweden, a million streams can pay up to around £4,300, making it a lucrative choice for these criminal networks.
Even an anonymous police investigator tried to get Spotify’s attention in 2021 to discuss this, but the company ghosted him. His conclusion:
“Spotify has become a money-making machine for these gangs. There’s a direct link to their criminal activities.”
The Connection to Us: Now, let’s bring this story closer to home. While the Swedish escapade might seem far away, it’s essential to see how it could resonate here in New Zealand. We’ve got our own gang culture intertwined with a vibrant music scene. Case in point: Salec Lekks Sua, a member of the rap group OneFour, recently made headlines with his return to our shores.
The warm reception and media frenzy around Sua’s return underscore the influence of gang-related music right here in our backyard. It shows the reach and impact of this genre in our society.
It begs the question: Could the fusion of music, especially gangster rap, and our unique culture potentially lure young individuals into criminal activities, much like we’ve seen in Sweden?
Our gang culture isn’t a one-size-fits-all deal; it’s diverse, with various groups operating across the country. The mix of this culture with music, especially in the digital era, is a fascinating and potentially concerning combo. Remember, global money laundering schemes can have ripple effects in our peaceful corner of the world.
The Role of Music Streaming Platforms: To get the full picture, we need to consider the role of music streaming platforms like Spotify in this saga. These platforms offer a treasure trove of music for millions of users, making them an unlikely but powerful tool for money laundering. Criminal networks can exploit the financial perks of these platforms, especially the higher payouts based on stream numbers, to cover up their dirty work.
From a financial standpoint, it’s straightforward. More streams mean more money, which attracts criminals looking to wash their wealth. But success stories for artists and streaming platforms can sometimes mask darker intentions.
It’s vital to remember that Spotify and other streaming platforms aren’t willingly aiding money laundering; they’re unwittingly becoming accomplices. These platforms must continuously beef up their security to stay ahead of evolving schemes, a daunting task.
HOW DO WE COMBAT EVOLVING THREATS LIKE THIS?
Given the developments outlined here, we must ask if our regulatory framework is up to the challenge. While New Zealand has stringent AML/CFT regulations, the ever-evolving money laundering tactics demand constant vigilance.
One key aspect is the responsibility of platforms like Spotify to spot and stop these activities. Spotify claims that less than 1% of streams are artificial, but even 1% can be a significant sum in the scheme of financing terrorist enterprises or funding for the expansion of provincial gangs.
The AML/CFT Act and associated regulations aren’t inherently geared to identify this particular typology. The nature of laundering money through music streaming platforms like Spotify is unconventional, and traditional AML/CFT measures may not automatically flag such activities.
To detect and combat this unique form of money laundering, we must rely on financial service providers’ effective and thorough application of Customer Due Diligence (CDD) and, more specifically, Ongoing Customer Due Diligence (OCDD). Financial institutions must diligently monitor their clients’ transactions, looking for unusual patterns or payments that deviate from the norm.
Additionally, the importance of Suspicious Activity Report (SAR) reporting cannot be overstated. Financial service providers must be vigilant in reporting any transactions or activities that appear suspicious or out of the ordinary. This requires not only compliance with AML/CFT regulations but also a proactive approach to identifying potential money laundering schemes that may not fit traditional molds.
In the case of money laundering through music streaming platforms, it’s often the anomalies and unusual financial behavior that will trigger the red flags. Therefore, a robust OCDD program and a culture of diligent SAR reporting are essential components of our defense against emerging and unconventional money laundering typologies.
The Swedish saga serves as a wake-up call. Money laundering isn’t confined to traditional financial institutions; it can seep into seemingly unrelated sectors, even the music industry. As we navigate this ever-shifting landscape of financial crime, we must stay vigilant in protecting our financial systems and society.
The fusion of music and money laundering might be an unexpected twist, but it reminds us that vigilance and adaptability are crucial for safeguarding our nation’s financial health. As professionals in this field, we must continue to educate ourselves, collaborate with authorities, and stay ahead of those who exploit the unexpected for illicit gains.
