Money laundering is a generic term used to pertain to the act in which criminals conceal the original ownership and control of an illegal conduct’s proceeds by making these appear to have come from a legitimate source.
There is a wide array of processes used by these people to launder money. While illegal money may be laundered minus the help of the financial sector, the truth is huge amounts are actually laundered from financial institutions. Many products and services from financial corporations can be used to these illegal acts.
How it is committed
Money laundering is committed when an individual takes part in an arrangement where the proceeds of a crime is involved. Such arrangements can be in the form of business dealings such as banking, fiduciary, and investment management. A particular offense will dictate the requisite degree of knowledge or suspicion. This, however, is present when a person providing the arrangement, product, or service is aware, suspects, or holds reasonable grounds to suspect that the property engaged in such arrangement embodies the proceeds of a crime.
In some instances, the offense may be committed when an individual knows or suspects that the individual whom they are making a transaction with is involved in or has received benefits from a criminal act.
How money is laundered
As mentioned, there is an extensive list of processes used by money launderers. Traditionally, however, there are three distinct stages wherein the laundering is carried out.
Placement is the first stage wherein the dirty money is introduced into a financial system. Layering is the next stage where the property is “washed” (thus, the term laundering) and its ownership and source is concealed. The last stage is integration. In this stage, the laundered money is re-introduced into the legitimate economy.
According to money laundering lawyer in Hong Kong, these stages may overlap and in some instances of financial crimes, the placement stage never actually happens.