Money laundering

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Money laundering is the act of disguising the origin of money obtained through illegal activities so that it appears to have come from a legitimate source. It usually involves sending the money through various financial transactions to change its form and make it difficult to follow: for example, bank-to-bank transfers, wire transfers between different accounts in different countries, and changing the type of currency.

­The most common types of criminals who need to launder money are drug traffickers, embezzlers, corrupt politicians and public officials, mobsters, terrorists and con artists.[1]

In the U.S., the Department of Justice, the State Department, the Federal Bureau of Investigation, the Internal Revenue Service and the Drug Enforcement Agency all have divisions investigating money laundering. State and local police also investigate cases that fall under their jurisdiction. The international community combats money laundering with the Financial Action Task Force on Money Laundering (FATF), and The United Nations, the World Bank and the International Monetary Fund also have anti-money-laundering divisions.


References

  1. How Money Laundering Works. Howstuffworks.com.