INTRODUCTION TO MONEY LAUNDERING

Here’s how money laundering works

The following movie compilation does a good job breaking it down.  Please do watch it now.  

The term “money laundering” is believed to come from Mafia ownership of Laundromats. Criminals were earning huge amounts in cash from blackmail, drug trafficking, gambling etc.

One of the ways in which they were able to make this money untraceable was by buying valid businesses and to blend their illegal earnings with the legal earnings they received from these businesses. Laundromats were chosen because they were cash businesses.

Money laundering is called what it is because that perfectly describes what takes place.

Whether it’s Al Capone using laundromats as a smoke screen, or Walter White cleaning up meth money through a car wash.

Meyer Lansky (called ‘the Mob’s Accountant’) was affected by the conviction of Capone for tax evasion. He starts searching for ways to hide money and he discovered the benefits of various Swiss Bank Accounts.  Lansky was one of the most influential money launderers ever. 

He incorporates one of the first real laundering techniques, the use of the ‘loan-back’ concept, which meant that illegal money could now be disguised by ‘loans’ provided by foreign banks, which could be declared to the ‘revenue’ if necessary, and a tax-deduction obtained into the deal.

Since then, the term has been widely accepted and is in popular usage throughout the world.

Criminal use three stages, though it’s often much more intensive and complicated than a three-step plan.