Cinema, Fine Art and Fraud

[dramatic music] If I say the word Hollywood to you, you're probably thinking of red carpets, box office records, glamorous stars, and creative powerhouses.

But what if I told you that behind the scenes there can be a completely different type of creativity at play, creative accounting.

It's estimated that the global film industry generates over $100 billion every year through box office sales, streaming, licensing, and home entertainment.

So from Hollywood to Bollywood, Nollywood, and everywhere in between, massive sums of money are passing across borders through web-like corporate networks.

And while this complexity drives the blockbuster entertainment we all enjoy, it also creates the perfect smokescreen for high-stakes financial crime.

From indie passion projects to Oscar-winning epics, cinema has inadvertently become a premier destination for washing dirty cash.

To help us untangle this web of scripts, screens, and dark money, we are joined by AML Intelligence's managing director, James Treacy.

So James, when we think of Hollywood creativity, creative accounting probably isn't the first thing that springs to mind.

So tell me, what is it about the film industry at large, not just Hollywood of course, that makes it so attractive to money launderers?

Well, I'll tell you, Dee, in a nutshell, it's the lack of supervision and the lack of regulation, right across the board, right across the globe, and it makes it so easy for organized criminals to launder and clean their money through movie productions.

So when you say movie productions, like, one thing that film productions, both big scale and independent, have in common is, regardless of the film, they cost an awful lot to make.

So there's often kind of eye-watering sums involved.

Does that make it easier to hide where those funds have come from, when there's just so much?

Yeah, for sure.

Yeah.

Like, at the end of the day, uh, laundering money through movies or film productions, it's a form of trade-based money laundering, and we've referenced trade-based money laundering in previous podcasts.

We all kind of know at this stage that it's a really complex area for investigators and for supervisors and for law enforcers and for compliance officers to keep track of, because it's transnational.

It's dealing in very complex international transactions, shell companies.

So this is what the, uh, organized crime gangs are using as a mechanism to launder their money through film.

Yeah, so talk me through some of those factors that you mentioned there, just the, the complex accounting, the, the international elements, and I suppose movie being a form of art being quite difficult to pin a value on.

Like, are they the kind of key factors at play, and would indie productions offer a safer bet for criminals, or do big studios or producer names kind of offer them the veneer of respectability?

Well, respectability doesn't really come into it.

I- In the past, perhaps.

[gentle music] Some of the Godfathers in the five families in New York have been associated with the production of The Godfather, and because it was a, it was a special project for them, they wanted to become involved, n- not necessarily to launder money, but just the prestige of it.

But by and large, in the vast majority of cases, the criminal's not looking for respectability or anything like that.