- What
is Money Laundering ?
Money
laundering is the process by which large amounts of illegally obtained
money (from drug trafficking, terrorist activity or other serious
crimes) is given the appearance of having originated from a legitimate
source.
Estimates
of the size of the money laundering problem ranges between $590
billion - $1.5 trillion annually.This is a staggering amount and
detrimental by any calculation to the financial systems involved
- What
are the steps in Money Laundering ?
Money
laundering is not a single act but is in fact a process that is
accomplished in three basic steps. These steps can be taken at the
same time in the course of a single transaction, but they can also
appear in well separable forms one by one as well. The steps are:-
Placement;
Layering;
and
Integration.
- What
are the different methods ?
- Placement
Cash
paid into bank (sometimes with staff complicity or mixed with
proceeds of legitimate business
Cash
used to buy high value goods, property or business assets.
- Layering
Wire
transfers abroad (often using shell companies or funds disguised
as proceeds of legitimate business
Cash
deposited in overseas banking system
- Integration
False
loan repayments or forged invoices used as cover for laundered
money
Income
from property or legitimate business assets appears
"clean".
Important
Owning
a bank, is a classic means to launder huge sums of money. In Russia
and some East European States, banks can be readily purchased for very
little money- though few of them have electronic banking access to SWIFT
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