Money laundering is a catch-all term for any activity that tries to convert the proceeds of crime into legitimate money. Crimes that generate money illegally include drug dealing, terrorism, tax evasion and fraud. Having committed a crime, a criminal will want to hide the proceeds and make them difficult for the authorities to trace back. That's because criminal proceeds are usually subject to confiscation orders.
This can be done via "layering" transactions designed to conceal the origin of the "hot" money. A classic target for this type of transaction would be eurobonds, which are not personally registered, making ownership harder to trace. Having done a number of layering transactions, the criminal will aim to integrate the sale proceeds from the last one back into the economy by spending the now "clean" money.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Millions of over 50s fear pension investment risk – how should you position your portfolio?To de-risk or not to de-risk, that is the question. Act too late and you could face irreversible losses. Move too early and miss out on significant gains that could transform your retirement.
-
£150 off energy bills: millions more to get discount this winterThe expansion of the Warm Home Discount scheme follows a government U-turn on the Winter Fuel Payment. We explain who will get the £150 discount
