What is money laundering?

esra1183 · Apprentice Joined: 06 Nov 2009 Posts: 1

I've heard so much in movies and newspapers about money laundering. I connect it with big criminal organizations because of them. What is money laundering? Would you explain how it works and why is it done? Is there money laundering these days and how people make money on it? How are legal institutions handling it?

andrew1053 · Apprentice Joined: 03 Jun 2011 Posts: 1

Money laundering is related with suspicious people of the community for a reason. It generally refers to financial transactions with hiding identity and destination of money in transaction. This term was related to organized crime in past because these organizations were hiding their finances from law. Today it's used for anybody cleaning of money to avoid tax payment or manipulate accounting. People who do it have different ways, they hide some capital through complex process, move it through transfers or invest it. Often, people who do it start a business which can't be monitored to hide certain transactions. Bank employees are trained to recognize suspicious transfers, but still there is no 100 efficiency. Money laundering is prevented in some security actions, and it's regulated by law. These days there are many rumors about corrupted politicians who clear money by making non-profitable organizations and then take money for private needs. There are also stories about people included in this process without knowing it. Electronic money laundering is in growth too, and legal actions are taken to stop it.