Money Laundering Essay

1166 Words5 Pages
According to the U.S. Department of Justice, money laundering is the process by which one conceals the existence, illegal source, or illegal application of income and then disguises that income to make it appear legitimate. Money laundering involves a three step process which includes placement, layering and integration (Albrecht et al, 2009). Placement is the first step and it includes the launderer opening up an account at a bank or some other type of financial business to make deposits with the illegal money. The placement step is often looked at as the most risk taking step because the launderer does not know the reaction of the bank and how they are going to accept a large cash deposit. If the deposit is too large the bank can…show more content…
Money Laundering According to Hopton (2009), the Bank Secrecy Act of 1970 was created in order to prevent money laundering. The act was made to try to discourage illegal acts such as money laundering from happening and to deter the criminals from even thinking about committing the crime. Woods (1998) stated that money laundering was not a criminal offense at the time the Bank Secrecy Act was passed. The act provides information on the movement of money through financial institutions in the United States and it monitors the movement of money into and out of the United States. It requires banks and other financial businesses to help the government in trying to prevent and detect money laundering. The federal government law enforcement agencies use the information gathered through the Bank Secrecy Act to detect criminal activities and regulatory violations. These businesses are required to keep track of all of their cash transactions of ten thousand dollars and more and report them to the IRS within forty five days. These transactions could include anything such as deposits, withdrawals, exchanges, payments, multiple transactions in one day and any cash deposits over the weekend or holidays (Woods, 1998). They also have to identify individuals who are requesting these large transactions and keep any records that relate to their transactions.
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