Money laundering
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Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source and destination of the money in question. In the past, the term "money laundering" was applied only to financial transactions related to otherwise criminal activity. Today its definition is often expanded by government regulators, such as the SEC, to encompass any financial transaction which is not transparent based on law. As a result, the illegal activity of money laundering is now commonly practised by average individuals, small and large business, corrupt officials, and members of organized crime, such as drug dealers or Mafia members.
If a person is making thousands of dollars in small change a week from his business (not unusual for a store owner), and he wishes to deposit that money in a bank, he cannot do so without possibly drawing suspicion. In the United States, cash transactions and deposits of more than $10,000 are required to be reported to the Financial Crimes Enforcement Network (FinCEN), along with any other suspicious financial activity.
One method of keeping this small change private would be for an individual to give his money to an intermediary who is already taking in large amounts of cash money. The intermediary would then deposit that money into his account, take a premium, and write a check to the individual. Thus, the individual draws no attention to himself, and can deposit his check into a bank account without drawing suspicion.
Another method involves establishing a business whose cash inflow cannot be monitored and funneling the small change into this business and paying taxes on it. All bank employees however are trained to be constantly on the lookout for any transactions which appear to be an attempt to get around the currency reporting requirements.
By the strictest definition of the term, anyone who assists in concealing the proceeds from his transactions is considered a money launderer. An individual therefore may be unwittingly employed by money launderers, and may still be criminally liable in many jurisdictions.
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 method was legal gambling via slot machines—a way to efficiently transform giant volumes of coins into easily movable currency. Another business so employed was laundries, and from this particular aspect of the trade, the term "laundering" emerged.
See also
External link
- Offshore News - latest news and articles about money laundering, tax havens, offshore banking (http://www.offshore-income.com/)
- What is Money Laundering? from CounterMoneyLaundering.com (http://www.countermoneylaundering.com/p01.htm)
de:Geldwäsche es:Lavado de dinero fi:Rahanpesu fr:Blanchiment d'argent he:הלבנת הון ja:資金洗浄 pl:Pranie brudnych pieniędzy