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Money Laundering

Money Laundering

Money Laundering

Money laundering is the process by which criminals conceal or disguise their proceeds and make them appear to have come from legitimate sources.

Money laundering allows criminals to hide and accumulate wealth, avoid prosecution, evade taxes, increase profits through reinvestment, and fund further criminal activity. While many definitions for money laundering exist, it can be defined very simply as turning “dirty” money into “clean” money. And it’s a significant crime—money laundering can undermine the integrity and stability of financial institutions and systems, discourage foreign investment, and distort international capital flows.

The FBI focuses its efforts on money laundering facilitation, targeting professional money launderers, key facilitators, gatekeepers, and complicit financial institutions, among others.

Money laundering is usually associated with crimes that provide a financial gain, and criminals who engage in money laundering derive their proceeds in many ways. Some of their crimes include:

  • Complex financial crimes
  • Health care fraud
  • Human trafficking
  • International and domestic public corruption
  • Narcotics trafficking
  • Terrorism

The number and variety of methods used by criminals to launder money makes it difficult to provide a complete listing, but here are a few of the ways through which criminals launder their illicit proceeds:

  • Financial institutions
  • International trade
  • Precious medals
  • Real estate
  • Third party service providers
  • Virtual currency

There are three steps in the money laundering process—placement, layering, and integration. Placement represents the initial entry of the criminal’s proceeds into the financial system. Layering is the most complex and often entails the international movement of funds. Layering separates the criminal’s proceeds from their original source and creates a complex audit trail through a series of financial transactions. And integration occurs when the criminal’s proceeds are returned to the criminal from what appear to be legitimate sources.  

Detection and Deterrence

Money laundering is a massive and evolving challenge that requires collaboration on every level.  The FBI regularly coordinates with:

  • Other federal, state, and local law enforcement agencies to detect and deter the money laundering threat in the U.S.;
  • Our international partners to help address the increasingly complex global financial system, the cross-border nature of many financial transactions, and the increased sophistication of many money laundering operations; and
  • All aspects of industry touched by the money laundering efforts of criminals.