What is money laundering? Money laundering is the process of concealing or disguising the source of money obtained by illegal means. This process enables the criminal to enjoy these profits without their illegal source being uncovered. Typically, embezzlement, insider trading, bribery and fraud schemes can produce large profits. The criminal would have the incentive to disguise the proceeds from those illegal actions to legal gains through money laundering. In such a case, the individual or group involved in criminal activities will try to control the funds without attracting attention to the underlying activity. Usually, criminals will do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

How does money laundering occur? Money laundering usually involves three stages to take place. In the first stage, the launderer will try to introduce the illegal proceeds into the financial system. There are many ways to do so. For example. the launderer can break the large amount of cash into many small pieces. Then he can use the proceeds to purchase a series of monetary instruments, such as stocks, securities, money orders and so on. Those monetary instruments share a characteristics that they could be collected and deposited into accounts at another location. In the second stage, the launderer will try to convert or move the funds to distance them from their source. This might be done by the purchase and sales of investment instruments, or the launderer might wire the funds through a series of accounts at different banks across the world. It is very prevalent for launderer to use scattered accounts for money laundering. In some cases, the launderer might disguise the transfers as account payments for goods or services, which create a legitimate appearance for those illegal proceeds. In the