Forensic Economic Expertise in Money-Laundering Cases

In money-laundering cases the verdict often rests not on testimony but on figures: whether a real supply of goods stood behind a payment, where the money went, and how much actually passed through as transit. These are precisely the facts that forensic economic expertise establishes — independently and solely on the basis of documents. Below I explain what an economic expert actually examines, under which specialties and methods, and — most importantly — which questions are worth putting to the expert and which are doomed to be declined.

What the expert establishes in a laundering case

Forensic economic expertise answers questions about the factual, not the legal, side of the movement of funds. In cases concerning the legalization (laundering) of property obtained by criminal means (Article 209 of the Criminal Code of Ukraine — the KK), an economic expert is typically expected to establish:

• the documented movement of funds — the actual credits and debits on the accounts, their amounts, dates, payment purposes and counterparties, according to the bank statements;
• the reality or fictitiousness of transactions — whether a payment is backed by a real movement of goods, works or services confirmed by primary documents, accounting records and the enterprise’s resources;
• the amount of funds that passed through transactions without a documented supply of goods, or the sum introduced into legal circulation through contracts or the acquisition of assets;
• the interconnection of transactions — the chain of transfers “who → to whom → how much → when → on what basis”, the transit nodes, the splitting of sums, and cash withdrawals.

There is an important nuance regarding the “amount of legalized proceeds”: the expert calculates the sum that followed a particular route or lacked a supply of goods, but does not label it “legalized” — that is a legal qualification reserved for the court. More on this boundary below.

Specialties: 11.1, 11.2, 11.3

Economic examinations are performed under three related expert specialties (per the Ministry of Justice of Ukraine — Minyust — classification). In complex cases they are often combined within a single comprehensive examination.

Specialty	What it examines
11.1	Documents of accounting, tax accounting and reporting
11.2	Documents on the economic activity of enterprises and organizations
11.3	Documents of financial and credit operations

In a typical laundering case, 11.1 (how the transactions are reflected in accounting and reporting) usually works together with 11.3 (the movement of funds across bank accounts and credit operations). When the enterprise’s activity as a whole must be assessed — the reality of its business processes, whether turnover matches its resources — 11.2 is brought in. Correctly identifying the specialty matters already at the commissioning stage: an expert has no right to resolve questions outside the relevant specialty.

Objects of study: what the expert works with

The opinion is built on the materials provided, not on assumptions. A typical body of objects in laundering cases:

• primary documents — contracts, delivery notes, work-completion acts, invoices, cash documents;
• bank statements for the accounts of enterprises and individuals — the principal source on the actual movement of funds;
• contracts and their annexes — the legal basis for payments, later matched against the real performance;
• tax reporting — declarations, calculations and annexes, data on declared turnover (including materials from audits by the State Tax Service — DPS);
• accounting registers — turnover-balance sheets, account cards, the general ledger, and counterparty analytics.

The quality of the opinion depends directly on the completeness of these materials. If some statements or primary documents are missing, the expert is obliged to state the limits of the study rather than “fill in” the missing links. Ensuring a complete and coherent body of documents is therefore the task of whoever commissions the examination.

Methods: how the expert tests transactions

Documentary verification

The basic method: matching a transaction against the documents that should have accompanied it. A payment for goods implies a contract, a dispatch note, transport documentation, receipt into the warehouse, and reflection in the accounts. The absence of these traces where a payment exists is the first sign of a transaction without goods (a fictitious supply).

Cross-checking

The same transactions are verified against the documents of both parties — supplier and buyer. If the operation is recorded by one counterparty but has no confirmation on the other side (no resources, no staff, no movement of goods), the discrepancy becomes the subject of study. Cross-checking is especially effective against fictitious links in chains of transfers.

Economic analysis

This examines the systemic logic rather than a single transaction: whether the volume of funds matches the scale, headcount and resources of the enterprise; whether account turnover is consistent with declared figures; how economically justified cash withdrawals and rapid transit are. It is economic analysis that reveals a mismatch between the movement of funds and real business activity.

How the expertise is commissioned

The grounds for an examination in criminal proceedings is the need for specialized economic knowledge; the general procedure is set by Articles 242–244 of the Criminal Procedure Code of Ukraine (the KPK). Procedurally, engaging an expert is formalized as follows:

• the prosecution — an investigator, prosecutor, or detective of the Bureau of Economic Security (BEB) — engages the expert by a ruling (instruction) to conduct the examination;
• the investigating judge or the court — by a decision: on the motion of a party (including the defense, which has the right to engage an expert on its own) or directly during trial.

The institution itself is governed by the Law of Ukraine “On Forensic Expert Activity”, and the procedure for commissioning and conducting is set by the Instruction on Commissioning and Conducting Forensic Examinations, approved by Order of the Ministry of Justice No. 53/5. Examinations are carried out using methodologies from the Register of Forensic Examination Methodologies maintained by Minyust — which ensures that the opinion is reproducible and verifiable.

Financial-economic expertise is possible not only in criminal proceedings: the Commercial Procedure Code (HPK), the Civil Procedure Code (TsPK) and the Code of Administrative Procedure (KASU) likewise allow a court to commission an examination when resolving a dispute requires specialized economic knowledge. The methodology for studying the movement of funds is the same — only the procedural form and the range of questions differ.

Limits of competence: what the expert does not decide

This is a matter of principle, and it is exactly here that opinions most often collapse. A forensic economic expert describes facts — the movement of funds, its volumes and routes, discrepancies between documents, accounting records and real transactions, and signs of transit and fictitious supply.

By contrast, the expert has no right to:

• give a legal qualification of the act (in particular under Article 209 of the KK) or conclude that “laundering” occurred as a legal assessment;
• establish a person’s intent;
• establish the guilt of a specific subject;
• call an enterprise “fictitious” — that is a legal category (the expert only records the absence of signs of real activity).

Qualification of the act, intent and guilt are established by the investigation, the prosecutor and the court. The most common defect of such opinions is an assertion of “legalization of criminal proceeds” without a predicate (underlying) offense established in the proceedings. Aggregated materials of the State Financial Monitoring Service (Derzhfinmonitoring) on suspicious transactions may be a trigger for proceedings, but they replace neither a proven criminal origin of the funds nor the expert examination of documents. If the predicate act has not yet been proven, presenting the movement of funds as “laundering” oversteps the limits of competence and is an immediate weak point for the defense.

How to frame questions for the expert

The question determines the result. A proper question concerns facts within the scope of economic knowledge and begins with “what movement”, “what amount”, “is it confirmed by documents”, “does it correspond”. An improper one asks the expert to do the court’s job.

Examples of correct questions

1. What movement of funds (credits and debits) occurred on the accounts of enterprise ”___” from ___ to ___ — by amount, date, counterparty and payment purpose, according to the bank statements provided?
2. Are the transactions of enterprise "" with counterparty "" in the amount of ___ confirmed by primary accounting documents; is a real movement of goods (works, services) for these transactions reflected in the accounts?
3. What sum of funds was transferred from account "" to accounts "" and subsequently withdrawn in cash (cashed out), according to the bank statements provided?
4. Do the volumes of funds that passed through the accounts of enterprise ”___” correspond to the indicators of economic activity declared in the tax reporting for the relevant period?
5. Is there a documented link between the crediting of funds under contract "" and the subsequent acquisition of asset "" / transfer to account ”___”?

Questions to avoid

• “Did money laundering (legalization) take place?” — legal qualification.
• “Did the manager act with intent / for the purpose of legalization?” — intent and purpose.
• “Is Mr./Ms. ___ guilty of committing a crime?” — guilt.
• “Is the counterparty a fictitious enterprise?” — a legal assessment established by the court.

The expert will either decline such questions, or any answer to them becomes grounds for challenging the opinion. The correct approach is to reformulate them in terms of facts: not “is the counterparty fictitious”, but “is the reality of the transactions with it confirmed by primary documents”.

Practical guidance for the parties

• Investigator / detective — ask about the movement of funds and the correspondence of transactions to documents, rather than asking to “confirm laundering”; provide a complete body of statements and primary records, and correctly identify the specialty (11.1 / 11.2 / 11.3).
• Defense counsel — check whether the expert stepped beyond the limits of competence, whether each assertion rests on a document, whether alternative economic explanations for the transactions were considered, and whether a methodology from the Register was applied.
• Business owner — remember that transit payments and “convenient” counterparties without real substance create risk even absent malicious intent; keep the primary documents that confirm the reality of transactions.

The strength of forensic economic expertise lies in restraint: to show precisely the movement of funds, its volumes and discrepancies, while leaving the legal assessment to the court. If you are a party to proceedings or an owner who wants to assess the risks of a flow of funds in advance, or the quality of an existing opinion, a considered consultation and professional expertise will help you build a position on facts. Get in touch — I will review your matter within the limits of expert competence.