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What is money laundering?

On Behalf of | Sep 11, 2023 | Money Laundering

Money laundering involves taking dirty money earned from illegal activities and making it appear clean to obscure its illicit origins. By doing so, individuals or groups can enjoy their ill-gotten gains without drawing suspicion.

Money laundering traditionally involves three pivotal stages: placement, layering and integration. Placement refers to putting illicit funds into the financial system, often through bank deposits or buying assets.

Layering is perhaps the most complex stage, aiming to obscure the origins of the money. This is achieved by moving the money through various transactions, changing its form, and making its trace increasingly complicated.

Finally, the integration phase is where the money, now distanced from its illicit source, is used to purchase legitimate assets or invest in legal business ventures.

Money laundering in action

Think of someone purchasing an expensive piece of art with illegal funds. They later sell this artwork, claiming the proceeds as a legitimate income. Another instance might be a sham business that mixes its legal earnings with the money from illegal activities, creating a murky financial picture that’s hard to decipher.

The digital age has also ushered in newer methods, with digital currencies and online platforms providing more avenues for such activities. This also brings about an increased opportunity for funds to be traced.

Facing money laundering charges is a serious matter. Defendants should ensure they understand their options for a defense so they can make decisions they feel are in their best interests.