YOGYAKARTA - Money laundering is an illegal process to generate large amounts of money generated by criminal acts, such as drug trafficking or terrorist financing, which makes it seem as if this came from a legitimate source. Money from criminal activities is considered dirty, and the "washing" process is to make it look clean. So, what is money laundering?
Money laundering is a serious financial crime used by street-level criminals and criminals.
Most financial companies currently have anti-money laundering policies to detect and prevent this activity.
How Money Laundering Works
Money laundering is essential for criminal organizations that want to use money illegally obtained. Dealing with large amounts of illegal cash is inefficient and dangerous. Criminals need a way to store money in legitimate financial institutions, but they can only do so if it appears to come from legitimate sources.
The money laundering process usually involves three steps: placement, coating, and integration.
Note that in real-life situations, this template may differ. Money laundering may not involve these three stages, or some stages can be combined or repeated several times.
There are many ways to launder money, from simple to very complicated ones. One of the most common techniques is to use a legitimate money-based business owned by criminal organizations. For example, if an organization has a restaurant, daily cash receipts may be inflated to channel illegal cash through restaurants and go into restaurant bank accounts. After that, the funds can be withdrawn as needed. This type of business is often referred to as "fronts".
Money Laundering Variant
One common form of money laundering is called smurfing (also known as setting'). This is where criminals break up large amounts of cash into several small deposits, often spreading it to many different accounts, to avoid detection. Money laundering can also be done through the use of currency exchange, wire transfer, and smuggling of cash, which smuggles large amounts of cash across borders and keeps it in overseas accounts, where money laundering is less stringent.
Other money laundering methods include:
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