You’ve seen it on your favorite crime television shows – a mastermind crime lord making thousands of dollars a day from illegal activity and somehow pretending it was earned from a business. Walter White from the hit television series Breaking Bad isn’t the only person to money launder, in fact, the occurrence is exceeding and extensive. There are various forms of money laundering, and to many people, it’s an overall difficult process to learn how it works.
Money laundering happens in nearly every country in the world, and while the ways sometimes vary, money laundering usually involves the same type of steps.
When someone is laundering money, they initially need a large amount of money to begin with. Since money laundering is criminal, the origins of the money are criminal as well. Some examples include sex trafficking, drug trafficking and drug trade, loan sharking, and prostitution. However, there are many other ways in which criminals are given money, and sometimes money laundering happens in corrupt politics as well, through bribery, racketeering, tax evasion, etc.
After having the initial capital, money launderers look to invest in or build a business that looks legitimate. This means that their money needs to deal with smaller transactions with their money so as to not cause questions. Most often those who invest in businesses opposed to building their own are questioned later about their legality, as there is already an existing basis for trust and customer clientele. Many times these places are disguised as legitimate businesses such as fast food restaurants, dry cleaners, convenience stores, etc. The business appears to be operating as a normal business would, and once established, cash may be distributed as if a sale transaction actually occurred.
Money laundering is essentially the taking of proceeds gained from criminal and illegal activity and disguising the origin of the revenue. The steps of the process are generally easy to understand; initially the funds are deposited, eventually increased, and integrated with money which was not earned in the same matter. The process of avoiding speculation of fraud and criminal activity in these cash businesses is difficult with other issues such as depositing and tax filing. In fact, its common knowledge that in America, any deposit over $10,000 are reported.
While the schematics of money laundering seem simplistic, it’s actually extremely difficult to operate successfully after a period of time. While there are many different aspects to laundering, there are countless operations and organizations looking to detect and rid of any illegal activity such as that. Not to say that it is an impossible feat to money launder, but the launderer needs to be exceptionally intelligent and innovative, which are unusual characteristics for those dealing in illegal cash driven actions.