Mason School Faculty Awarded $15K Grant for Research on Money Laundering Detection

OISM professor will use Machine Learning tools to conduct a study examining cross-country factors that predict money-laundering activities

The Association of Certified Fraud Examiners (ACFE) awarded Raymond A. Mason School of Business Clinical Associate Professor of Operations and Information Systems Management (OISM) Dr. Tingting “Rachel” Chung a $15,000 research grant.

Chung and Dr. Pratyush Sharma at the University of Alabama will use a dataset provided by JP Morgan AI Research to identify and explore different Machine Learning modeling techniques, and transaction-level and country-level predictors, that are most effective in determining money laundering activities.

“Money laundering is an extremely important topic for the anti-fraud industry, but it is also been very challenging to research given the paucity of real or realistic data. Financial institutions are usually extremely reluctant to share money-laundering data given its sensitive nature,” said Chung. “The synthetic nature of the dataset allows the research to explore potential scenarios that may not have happened in real life.”

Over the last decade, Chung has conducted several research studies related to fraud risk, fraud detection, and fraud prevention. Her first academic position after completing her PhD in Information Systems was at Carlow University in Pittsburgh where she was put in charge of developing three courses for their Master’s in Fraud and Forensics program. The course design process inspired her to conduct research in the field that could contribute to expanding a relatively small existing body of academic work.

Chung sought out and obtained her first research grant for $10,000 from the Institute for Fraud Prevention (IFP) which is now the ACFE Research Institute (ARI). She and Dr. Dennis Galletta at the University of Pittsburgh conducted a study on the genetic basis for Internet fraud detection which was featured in a BBC World News interview. The following year, Chung received another grant for a study on the genetic basis for deception detection with Dr. Chih-Chen Lee at Northern Illinois University which was published in the Journal of Managerial Psychology.

Since then, Chung has been published in the Journal of Forensic Accounting Research with data support from ARI, and received a third IFP research grant with Dr. Stephanie Rosenthal at Carnegie Mellon University to study how domain knowledge affects ways analysts explore and validate financial data. The results of that research were presented at the First ACM International Conference on AI in Finance, co-sponsored by JP Morgan AI Research.

“Dr. Sharma and I are grateful for the generous support by ARI and JP Morgan AI Research. I am particularly grateful for ARI’s support for my research projects over the last ten years,” she said.

Chung will spend the spring semester analyzing the JP Morgan AI Research dataset and writing up the report. The study is an extended idea based on another ACFE supported project on technology and fraud that is currently under review at the Information Systems Research.

“My hope is this research will make an important contribution to the relatively small literature on money laundering in fraud detection and fraud risk research,” she said.