Using Foursquare to Detect Tax Evasion / Money Laundering

I wonder if there are governments or private parties already doing it. The idea is pretty simple:

The Foursquare API allows anyone to keep track of the number of check-ins to date for any venue. For example, the Eiffel Tower (Foursquare login required) has 36429 checkins from 26358 users as I write this.

For fairly popular venues, you could correlate the daily / yearly Foursquare activity with the reported revenue. Of course you’d have to do some normalization: Foursquare’s popularity grows over time, and obviously it has different penetration rates across countries / regions. This shouldn’t be a big deal.

For venues  within a very specific category (e.g. to-go coffee shops or McDonald’s franchises), there should be a very high correlation between revenue and check-ins. If one venue reports significantly less revenue than their check-ins would predict, that’s a red flag for an audit. Conversely, if a shop reports relatively high revenue numbers but has few check-ins for its class, there’s a chance it may be laundering money. This alone is far from an indictment (e.g. mobile reception could be terrible in the area so patrons wouldn’t check in very often), but it’s a cheap starting point to investigate more.

Of course this is not limited to Foursquare, you could aggregate check-in data from other platforms (Facebook, Yelp, etc.) for a more robust signal.

You’re welcome, IRS 🙂