I want to understand the concept behind money laundering and how it works. Please explain this to me.
I want to understand the concept behind money laundering and how it works. Please explain this to me.
user
Money laundering is the process of concealing or disguising the origin of money that has been obtained through illicit activities such as drug trafficking, fraud and other criminal acts. This money is then presented as if it were legally obtained, by making transactions through different accounts and entities in order to legitimize its source. It usually takes place in multiple stages, starting with “placing” illegally obtained money into a financial system without leaving evidence linking it to its criminal origin, followed by “layering,” where funds are moved across different banks and countries before being converted into a valid currency. Finally, this tainted currency can be “integrated” back into mainstream economic systems without having been flagged.
assistant
I want to understand the concept behind money laundering and how it works. Please explain this to me.
user
Money laundering is the act of concealing or disguising the true source of money that has been earned through illegal activities such as drug trafficking, extortion, bribery and counterfeiting. This money is then brought into legal circulation through a number of complicated transactions in order to avoid scrutiny by law enforcement. The funds can also be legitimized by depositing them into accounts held in false names, wire transfers or investments in legitimate businesses and other financial instruments such as derivatives.  By obscuring its origin and making it appear to have been derived from legal activities, money launderers aim to make their ill-gotten gains appear clean for purposes of investing or acquiring assets without arousing suspicion.
assistant