Money Laundering is the process of concealing the sources of funds received through illegal means and making it look legal.
To better understand Money Laundering, Laundering is the act of washing to make clean hence, Money laundering can be said to be the act of making dirty money look clean. Money acquired through illegal means are made to go through different process which eliminate the illegality of the fund thereby making the money look like it is acquired through legal means.
For example, money acquired through smuggling of drugs, terrorism can be used to start a business, invested in real estates to remove the suspicion surrounding how those funds are acquired.
Money laundering is an illegal activity because it allows criminals to profit from crime, and it usually involves more than one illegal step to take place: ... Having travelled through a number of financial transactions, the proceeds of the crime are now fully integrated into the financial system and can be used for any purpose.
Methods/Stages of Money Laundering
There are 3 stages of Money Laundering which are
1. Placement
2. Layering
3. Integration
1. Placement: Placement involves the act of putting the illegal money into the financial system. Here, the dirty money is made to pass through the financial system.
2. Layering: Layering is making the source of the money very hard to know by engaging in different transaction using the illegal money. With Layering, it is difficult to know the main source of the money as the money will be used for transaction that cannot be traced to the illegal source.
3. Integration: After the previous steps has been done, the money is then withdrawn from the financial system and used for whatever purpose it is intended for.
Money Laundering is the process of concealing the sources of funds received through illegal means and making it look legal.
To better understand Money Laundering, Laundering is the act of washing to make clean hence, Money laundering can be said to be the act of making dirty money look clean. Money acquired through illegal means are made to go through different process which eliminate the illegality of the fund thereby making the money look like it is acquired through legal means.
For example, money acquired through smuggling of drugs, terrorism can be used to start a business, invested in real estates to remove the suspicion surrounding how those funds are acquired.
Money laundering is an illegal activity because it allows criminals to profit from crime, and it usually involves more than one illegal step to take place: ... Having travelled through a number of financial transactions, the proceeds of the crime are now fully integrated into the financial system and can be used for any purpose.
Methods/Stages of Money Laundering
There are 3 stages of Money Laundering which are
1. Placement
2. Layering
3. Integration
1. Placement: Placement involves the act of putting the illegal money into the financial system. Here, the dirty money is made to pass through the financial system.
2. Layering: Layering is making the source of the money very hard to know by engaging in different transaction using the illegal money. With Layering, it is difficult to know the main source of the money as the money will be used for transaction that cannot be traced to the illegal source.
3. Integration: After the previous steps has been done, the money is then withdrawn from the financial system and used for whatever purpose it is intended for.