The primary reason for money laundering is hiding the location of funds. This is important because taxing authorities will come after the funds if the money can be traced back to a criminal enterprise.
Individuals wishing to avoid taxation on their ill-gotten gains might use this method to hide their funds.
Money Laundering can take many forms, ranging from simple to complex. Simple examples include hiding money and using it for illegal activities. Money Laundering can also occur through more complex schemes, such as when a money-laundering operation is run by a money launderer and some unsuspecting employees.
A minor type of cash deposit is known as petty cash.
Bulk cash smuggling is the physical smuggling of cash out of a country and depositing it in a financial institution in another location. Sometimes, banks in areas that suffer high crime rates are required to tell depositors if large amounts of cash were withdrawn in a short amount of time.
Cash-intensive business: Businesses that handle cash as part of their usual course of business may include businesses such as strip clubs, casinos, and banks.
Trade-based laundering: Adjusting the value of goods in transit, so that dirty money doesn't appear in exports.
Popular methods of hiding assets include
- shell companies;
- "round-tripping;"
- bank captures;
- casinos, and many more (which we won't get into here).
The elements of money laundering are usually:
- knowingly engaging in a financial transaction.
- Without their knowledge;
