Essay about Money Laundering

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What is Money Laundering? Money laundering is when funds from criminal activity are converted into “clean money” and cannot be traced back to the criminal activity. The goal is to conceal the criminal activity and the criminals involved. One of the main reasons people commit criminal acts is to make money off of it. Money laundering allows criminals to enjoy these illegal proceeds without law enforcement noticing. Money laundering can be used in drug trafficking, terrorism financing, or tax evasion. Obviously selling drugs is illegal. The drug industry is known to turn out a pretty hefty profit. Drug traffickers will launder money to hide their illegal drug sales. The United States is always looking at ways to prevent terrorism.…show more content…
The third step is integration, which is when the funds reenter the legitimate economy. Often times the illegal money is intertwined with legitimate money (Cliff and Desilets 3). Why is Money-Laundering a Threat? Money laundering can be detrimental to a country’s economy. It can be difficult for legitimate activities to compete, and it can cause unpredictable changes in money demand (“Consequences of Money Laundering”). It hurts businesses due to people being able to buy products for cheaper from people with laundered money in an effort to get clean money. Also these businesses have to deal with tax increases to make up for the loss of money the government is not receiving due to money laundering. A lot of laundered money filters through financial institutions. This can cause financial institutions to risk their reputation. Whether they are an accomplice or had no knowledge of the dirty money, the bad name recognition can cause investors and customers to lose faith in the organization (“Consequences of Money Laundering”). Money laundering reduces tax revenue due to difficulties in collecting revenue from an underground economy. Laundered money generally is used to expand existing criminal activities or create new ones, thus causing an even bigger economic consequence (“Consequences of Money Laundering”). Money-Laundering Statistics The United
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