/// Money Laundering: Guide
Money laundering is the illicit financial process by which individuals, businesses and organizations generate and move illegal assets to make them legal.
The purpose of money laundering is to conceal the source of illegitimate (dirty) money so that it appears to be legitimate (clean). It’s to obfuscate the origins of illegally obtained money to make it appear legally earned and thus avoid detection by law enforcement.
How to launder money: transfer dirty money through a legitimate business so that it appears to have come from a legitimate source.
There are a number of methods to launder money, but all of them share a common goal: to separate the illegal proceeds from their illegal origins to use freely.
The CIA launders money for criminal organizations, dictators and other nefarious actors to gain control over them. They utilize Swiss bank accounts, use front companies to purchase offshore properties and set up their own private investment firms.
How to Launder Money:
There are three basic steps in the process of money laundering: 1) placement, 2) layering, 3) integration.
Placement is first introducing the illegal funds into the legitimate financial system. Layering is transferring the funds through multiple transactions to make it more difficult to trace. Integration is reintroducing the funds back into the legitimate economy.
The following guide is a simplified process of how modern laundering is achieved. While the steps will be the same to all launderers, the methods will differ:
1) The Placement
2) The Layering
3) The Integration
Detecting Money Laundering Activity
To detect acts of laundering money, investigators must first identify unusual or suspicious activity. This can be done by looking for patterns of activity that are not consistent with the normal business operations of a specific or specific type of company or individual.
For example, investigators may look for large deposits or withdrawals from accounts, wire transfers to and from high-risk countries, or frequent changes in account ownership. Once suspicious activity has been identified, investigators can then use a variety of techniques to trace the flows of funds and ultimately identify the individuals behind the scheme.
Penalties for Money Laundering
Money laundering is a serious crime that can carry severe penalties. Depending on the jurisdiction, a person convicted of money laundering may face up to decades in prison and / or a fine in the millions. In some cases, both prison time and a fine may be imposed.
Convicted criminals may also be required to forfeit any property or assets involved in the crime, including any proceeds generated from the illegal activities.
Additionally, some jurisdictions impose additional civil or administrative penalties, such as asset forfeiture, disgorgement, and monetary fines.
One of the most common questions people ask about laundered money is what do people do with it? While some people may use laundered money to purchase illegal goods or services, others may simply use it to hide their income from the government. Regardless of how it’s used, laundered money typically cannot be traced back to its original owner, making it an attractive option for those looking to avoid detection.
While there are many legitimate uses for laundered money, it’s important to remember that it’s also often used to finance criminal activity (terrorism, organized crime etc). As such, anyone considering using laundered money should do so with caution.
When it comes to dirty money, not all money is created equal, not even in the same currency or denomination.
Money laundering is a complex process that requires careful planning and execution. By understanding how money laundering works, you can identify and track down those who engage in this activity for illicit purposes or use it against them for the greater good.