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Money laundering

Money laundering is the practice of moving large cash sums through legitimate channels in order to conceal its source or to prevent knowledge of the money in question. Money laundering is a common activity used by members of organized crime, such as drug dealers and mafioso.

If someone is making thousands of dollars in small change a week from their illegitimate business, and wishes to deposit that money in a bank, they cannot do so without drawing suspicion. Deposits of more than $10,000 are reported to the Financial Crimes Enforcement Network (FinCEN) of the United States, along with any other suspicious financial activity. One method of laundering that money would be to give it to an intermediary who is already taking in large amounts of cash money. The intermediary can then deposit that money into their account, and write a check to the individual running the illegitimate business after taking a premium. Thus, the individual draws no attention to himself, and can deposit his check into a bank account without drawing suspicion.

By the strictest definition of the term, anyone who assists a criminal in concealing the proceeds from his crimes is considered a money launderer. People are often thus employed unwittingly for money laundering, and they may still be criminally liable in many jurisdictions despite their unawareness.

The term "money laundering" is said to have evolved from the Prohibition era in the United States. Many methods were devised to disguise the origins of money generated by the sale of then-illegal alcoholic beverages. One such method was, interestingly, legal gambling via slot machines -- a way to efficiently transform giant volumes of coins into easily moveable currency. Another business so employed was laundries, and from this particular aspect of the trade, the term "money laundering" emerged.



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