Everything you need to know about money laundering!

In today’s world, the most important thing is undoubtedly money. Everyone is working to earn money, but the only difference is some use legitimate ways to earn money, whereas some desperate people go for illegal ways to fill their pockets. Most of these people generating incomes from illegal sources such as drug trafficking, extortion, etc. make their income look to have created from a legal source. This process of making illegal income look like legitimate income is known as money laundering. Money laundering is illegal, and if you are found doing it, you will inevitably end up in jail.

Money laundering is a three-stage process, and a person makes his illegally earned money go through this process, and at the other end of this process, the money becomes completely legal, and you can easily use it in a different transaction. Illegal money is also known as black money as the person doesn’t have any proof of its source, and he launders the money to make it white and all legal. To learn more about money laundering, you need to understand about different stages of money laundering and what happens in each stage.
What are the different stages in the process of money laundering?

First stage – Placement
The first stage of money laundering is the placement, and the whole process begins here. In this stage, the illegally earned money is infused into the financial system and initiates the process of making it legal. It offers two significant benefits; first, that it makes the person free from the risk of holding illegal money, and second that makes the money enter into the legal financial system. People use various methods to shift a massive amount of money into the financial system, as doing it directly will raise the eyebrows of the officials. Some of the common ways used to shift illegal money into the financial system are; buying gambling chips, paying loan interest, buying foreign currency using the money, investing in legal businesses, etc.

Second stage – Layering
The second stage is layering, where the money is sent away from its original source, and this stage involves the most complexities. In this stage, usually, the money is sent overseas to different countries, and there are distributes in small portions and invested in various businesses. It makes it difficult to detect and allows the launderer to take advantage of the police investigation and judicial delays.

The final stage – Integration
This is the final stage of the process of money laundering. This stage is termed as integration as in this stage, the money gets converted from illegal to legal and gets back to the original owner. The money is infused in the financial system first, and then it is layered by multiple transactions, which make it difficult to be tracked or traced. Once it is done, the money gets integrated and becomes fully legal. Now the money can be used for any purpose and will not attract any legal problem for the owner as now it has legal proof of source.

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