Money Laundering

Money laundering is the process of concealing the origins of illegally obtained money, typically by converting it into legitimate assets or moving it through complex financial transactions to make it appear legal. It is a criminal offense in most countries and is closely monitored by financial and regulatory authorities.

Key Features: Involves illegally obtained funds from activities such as drug trafficking, corruption, tax evasion, fraud, or terrorism. The process usually has three stages: Placement: Introducing illegal money into the financial system (e.g., depositing cash into banks). Layering: Conducting complex transactions to obscure the money’s origin (e.g., transfers, shell companies, investments). Integration: Making the funds appear legitimate by using them for legal investments or purchases. Money laundering is illegal under laws like the Prevention of Money Laundering Act (PMLA) in India and international conventions.

Examples: Using cash earned from illegal activities to purchase real estate and then selling it to claim it as legitimate income. Routing illicit funds through multiple companies or countries to hide the source. Depositing large amounts in bank accounts under fictitious names