Money laundering

Money laundering is the process used to disguise the source of money or assets derived from
criminal activity. Profit-motivated crimes span a variety of illegal activities from drug trafficking
and smuggling to fraud, extortion and corruption. The scope of criminal proceeds is significant;
the United Nations Office on Drugs and Crime estimated money laundered globally in one year
is $800 billion to $2 trillion in current US dollars.

Money laundering facilitates corruption and can destabilize the economies of susceptible
countries. It also compromises the integrity of legitimate financial systems and institutions and
gives organized crime the funds it needs to conduct further criminal activities.

It is a global problem, and the techniques used are numerous and can be very sophisticated.

Common money laundering methods

There are several common methods of money laundering.

Using a nominee: A family member, friend or associate who conducts transactions on behalf of
the money launderer is considered a nominee. A nominee allows the money launderer to
disguise the original source and ownership of the money.

Structuring: When a person conducts multiple financial transactions to keep the dollar amounts
below the reporting limit. The individual making these transactions is trying to avoid giving their
personal identification and, in doing so, avoids disclosing the source and ownership of the

Smurfing: To avoid being identified, a money launderer often uses one or more individuals
(smurfs) to carry out transactions under the reporting limits, allowing both the launderer and
the smurf to go unidentified.


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