Money Laundering Is Used By Drug Dealers, Terrorists And Other Corrupt Organizations

2074 WordsNov 29, 20169 Pages
Originally developed in the 1970’s, money laundering is a technique used to disguise the proceeds of crime, and reintegrate them into apparently legitimate assets (Levi and Reuter 2006). Money laundering is commonly used by drug dealers, terrorists and other corrupt organizations (Seymour 2008). Drug trafficking, smuggling and embezzlement are examples of criminal activities that generate large amounts of illicit funds for criminal groups; the desire to legitimize these funds and minimize detection stimulate the demand for money laundering schemes (Buchanan 2004). Organizations try to make the money appear legal and legitimate in order to minimize the possibility of being apprehended by authorities. Money laundering takes away the integrity of licensed financial systems and associations and ultimately provides organized crime the money it requires to perform additional criminal activities (Seymour 2008). There are 3 phases of money laundering; Placement, Layering and Integration. Placement is fulfilled by transforming the sum of cash obtained from criminal activities into a more movable and less dubious form. After this, inserting these earnings into the mainstream economic system makes the money appear legitimate. The purpose of this is to withdraw the illegal profits and isolate it from their illegal origins. However, the laundering mechanism is most susceptible during placement because illicit pursuit provokes large sums of cash, which is hefty and tough to obscure in

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