Dirty Docks

Money laundering converts dirty money from crimes like drug trafficking and corruption into seemingly legitimate funds.

via Wikipedia: Money laundering · see source

Money laundering is the process of illegally concealing the origin of money obtained from illicit activities such as drug trafficking, sex work (in some jurisdictions), terrorism, corruption, and embezzlement, and converting the funds into a seemingly legitimate source, usually through a front organization. As financial crime has become more complex and financial intelligence is more important in combating international crime and terrorism, money laundering has become a prominent political, economic, and legal debate. Most countries implement some anti-money-laundering measures.

Lore & Background

In the past, the term 'money laundering' was applied only to financial transactions related to organized crime. Today its definition is often expanded by government and international regulators such as the US Office of the Comptroller of the Currency to mean 'any financial transaction which generates an asset or a value as the result of an illegal act,' which may involve actions such as tax evasion or false accounting. In the UK, it does not need to involve money, but any economic good.

Courts involve money laundering committed by private individuals, drug dealers, businesses, corrupt officials, members of criminal organizations such as the Mafia, and even states. In United States law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. In United Kingdom law, the common law definition is wider. The act is defined as 'the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises'.

Reader's Guide

Money laundering typically involves three steps: The first involves introducing cash into the financial system by some means ('placement'); the second involves carrying out complex financial transactions to camouflage the illegal source of the cash ('layering'); and finally, acquiring wealth generated from the transactions of the illicit funds ('integration'). Some of these steps may be omitted, depending on the circumstances. For example, non-cash proceeds that are already in the financial system would not need to be placed.

According to the United States Treasury Department: 'Money laundering is the process of making illegally-gained proceeds (i.e., 'dirty money') appear legal (i.e., 'clean'). Typically, it involves three steps: placement, layering, and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts.'

Did You Know?

The successful prosecution of Al Capone on tax evasion brought a new emphasis on tracking and confiscating money, but existing laws against tax evasion could not be used once gangsters started paying their taxes.
HSBC was fined $1.9 billion in December 2012 for breaches of money laundering regulations.
BNP Paribas was fined $8.9 billion in July 2014 by the U.S. government for money laundering violations.