How to Launder Dirty Money
If you’re like me you have Money Laundering 101 about hit shows like ozark and breaking Bad. (The linked examples are very entertaining explanations of how money laundering works in their TV worlds, for reference.)
Money laundering, of course, does not refer to this literally Sanitize your cash—Washing is the process manufacturing illegal-receive money seems to come out seemingly legal business operations to avoid the wrath of the IRS or law enforcement agencies. While here at Lifehacker we would never dream of supporting financial crimeshere’s what you should know about how people launder money these days.
What exactly is money laundering?
As we have already covered, Money laundering is the process of money being laundered in an illegal manner, e.g. B. through drug sales, to make it appear as if it was earned legally. There are various channels for this Clean up dirty money, but three basic steps are usually required: placement, layering, and integration. Here is a quick overview of how each stage works:
1st placement. Here the dirty money is invested in seemingly legal assets. This is where criminals first put their fortunes into the financial system, and That’s where they’re most vulnerable to getting caught.
2. Stratification. This step is to remove money further from its filthy origins. It can take the form of transfers between multiple bank accounts as well as expensive purchases. Casinos are a prime example of layering, essentially trading large sums of money “washed” again and again each Night. A skilled money launderer builds an intricate web that is difficult to understand, such as: B. Transferring money to an offshore account, then transferring it to a shell company, then to another shell company, and so on.
3. Integration. To Money has been purified, it can be integrated into the mainstream financial channels. The original criminal can now access their funds through entirely ‘legitimate’ channels such as B. the purchase of real estate or another shell company for even more money laundering.
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methods of money laundering
The most obvious image of money laundering is some kind of cash business, like a car wash or a strip club. There are countless ways to launder money and the digital age has only made it easier for professionals to reinvent the money laundering game. Here are some of the most common technologiesnoQuestions and channels people use to launder money:
- disguise dirty Money by gambling in casinos, investing in real estate or opening shell companies.
- The use of “Smurfs”, aka exchanging dirty money in small chunks, to make the large sums of money more difficult to spot.
- Trade-based money laundering where they tamper with the price and volume of imports and exports to create a paper trail of fake profits.
- Owning a bank or mortgage company where they can move money between financial institutions fairly easily.
- Open foreign accounts and use exchange rates.
- Commit online banking fraud by transferring money directly to a victim’s account and then making unauthorized payments from their account.
- Loading and redeeming online payments, such as with prepaid gift cards.
Conclusion on money laundering
Money laundering is a key operation of organized crime and it is evolving: new technologies and cryptocurrencies give money launderers new opportunities to beat the ever-changing system. At the same time, law enforcement and government agencies keep adapting to uncover money laundering schemes as well. And while we’ve had a lot of fun here today, remember that money laundering is a highlyillegal activity. Not every “how to” article is a recommendation.