Money laundering
The process of transferring money obtained through illegal means (such as crime, smuggling, corruption, drug trafficking, or any other illegal activity)
Money laundering
Money laundering is the illegal process of concealing the source of funds generated by illegal activities (such as drug trafficking, corruption, or economic crimes) and converting them into funds that appear legitimate. This process takes place in three main stages:
- At this stage, the illegal money is introduced into the financial system. This stage includes transferring cash into bank deposits or purchasing assets such as real estate and cars.
- The goal of this stage is to make it difficult to trace the source of the funds. This is done by transferring funds between multiple accounts, conducting fictitious business transactions, or investing in countries with strict banking laws.
- The money is returned to the formal economy to appear legitimate. The money is used for investment projects or the purchase of legal assets.
Reasons why money laundering is dangerous:
Economically: It weakens the national economy by reducing the effectiveness of economic policies and increasing inflation.
Socially: It finances organized crimes, such as terrorism and human trafficking.
Politically: It threatens the stability of countries by manipulating markets and institutions.
Common examples of money laundering:
Creating shell companies to hide illicit funds.
Buying real estate under false names.
Using casinos to launder money through betting.
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