February 23, 2020
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Through The Wringer

Money laundering introduces illegal money into the financial system with an eye to recover some or all of it as clean money later. A Bank of England committee on money laundering has reported a three-stage pattern, often overlapping.

Through The Wringer

Placement: Physical disposal of cash proceeds from illegal activity. Cash can be paid into a bank, often mixed with proceeds of legitimate business, exported, or used to buy high value goods, property or business assets.

Layering: Separating the proceeds from the source by creating complex layers of transactions to disguise the audit trail and provide anonymity. Like wire transfers abroad, using shell companies; cash deposits with an overseas banking system; reselling goods and assets.

Integration: Providing legitimacy to criminally derived wealth, through false loan repayments or forged invoices. A web of domestic and international transfers makes the source hard to trace.

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