Money Laundering

Money laundering is the act of taking illegal money ("dirty" money) and putting it through a cycle of transactions that “washes” the funds and “cleans” them, making the money look like proceeds from legal activities. A money launderer is a person or a group that either has possession of the proceeds of a crime or of the assets that represent the proceeds of illegal activities such as fraud, theft, drug trafficking, or any other crimes.

1. Dividing a large transaction in many smaller ones to avoid suspicion
2. A person or group deposit money in to different banks at different times small parts of a large sum
3. Avoids the scrutiny which large sums attract
4. Term derived from the cartoon characters, The Smurfs, who lived in a large group of many small entities
5. Aka: Structuring

1. Money transferred from account to account
2. Final deposit made in a country where laws guarantee a lack of scrutiny

1. Use of legitimate companies: "dirty" money mixed with "clean" money derived by legitimate activities
2. Casinos are notorious targets for money laundering given the "cash heavy" transactions
3. Use of fake companies: payment for services that were actually never provided

1. 1970: Bank Secrecy Act established
2. This act aimed to detect and prevent money laundering
3. 1986: Congress passed Money Laundering Control Act
4. The act recognizes money laundering as a federal crime
5. Office of the Comptroller of the Currency established to enforce the finance laws