The ART of MONEY LAUNDERING (Mini Documentary)
# Money Laundering: How Criminals Clean Their Dirty Money
## Introduction
Let’s say you’re a criminal with millions or even billions of dollars, but you have one big problem: Transferring large sums of money or carrying suitcases full of cash will raise eyebrows. You need to launder the dough to make the dirty money appear to be clean money, so that then it can be spent anywhere in the world (say, on real estate, luxury yachts, strip clubs) no questions asked. Fear not. With a little financial detergent, your dirty money can become more or less untraceable.
## The Art of Money Laundering
China leads the world in this ancient art. Between 2002 and 2011, some $1.08 trillion departed the country illegally, despite currency-control laws that require people to obtain a permit to exchange more than $50,000 a year worth of yuan into any foreign currency. But this is a truly international pastime. Corrupt politicians, drug cartels, alimony deadbeats, nearly everybody’s doing it.
## The Three Steps of Money Laundering
When it comes to money laundering there are three main steps to doing it right.
### Placement
Placement is the stage when the money enters the financial system for the first time. In this step, the money may be deposited in a bank, added to the accounts of an existing business or disguised as a transaction. The placement is usually achieved through a series of regular small transactions.
### Layering
Layering is the stage where the illicit money is put together with legitimate money or placed in constant motion. Layering usually involves generating so many intricate transactions that the dirty cash disappears into them. Illicit money can be used to gamble, then placed into stocks, then shuffled around in different currencies and then used to buy financial products like life insurance policies.
### Integration
Integration is the stage where the money re-enters the legitimate economy. When the money appears to come from legal businesses or investments, or the trail has become too difficult to follow, the money can then be placed into larger-scale investments. Integrated cash is often placed into luxurious assets, properties, long-term investments, and new businesses.
## Types of Money Laundering Schemes
There are several types of money laundering, such as casino schemes, cash business schemes, smurfing schemes, and foreign investment schemes. A complete money laundering operation will often involve more than one of these as the money is moved around to avoid detection.
### Casino Scheme
The casino scheme works by funneling the money through gaming. The money is converted into chips, which are then briefly played with and then transferred back into cash. Often, the casino where the money is being laundered is in a different nation than the launderer’s nation of origin. This makes it difficult for law enforcement in either country to gather evidence that might reveal proof of the money laundering.
### Cash Business Scheme
The cash business scheme is one of the most used and popular schemes for laundering large amounts of physical cash. Even today, there are a lot of businesses who handle most of their transactions in cash. Illicit cash can be inserted into these transactions at a fast or slow pace.
### Smurfing Scheme
The term smurfing refers to the practice of distributing small amounts of a larger cash amount to a series of partners who then deposit the money in incremental amounts. Smurfing is used to get around the currency reporting requirements that banks are required to observe in a lot of countries. Small quantities that come from many partners are less likely to trigger an automatic report.
In conclusion, money laundering is a sophisticated process that involves multiple steps and various schemes to make illegal funds appear legal. By understanding the intricacies of money laundering, authorities can better combat financial crimes and protect the integrity of the global financial system.
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