Money laundering
Money laundering is the practice of engaging in financial transactions in order to conceal the identities, sources and destinations of the money in question. In the past, the term "money laundering" was applied only to financial transactions related to otherwise criminal activity. Today its definition is often expanded by government regulators to encompass any financial transaction which is not "transparent" enough for their liking. As a result, money laundering is an activity now commonly used by average individuals, small and large business, members of organized crime, such as drug dealers and Mafia members, as well as corrupt officials.If someone is making thousands of dollars in small change a week from their business, and wishes to deposit that money in a bank, they cannot do so without possibly drawing suspicion. In the United States, cash transactions and deposits of more than $10,000 are required to be reported to the Financial Crimes Enforcement Network (FinCEN), along with any other suspicious financial activity. One method of keeping this small change private would be to give it to an intermediary who is already taking in large amounts of cash money. The intermediary can then deposit that money into their account, take a premium, and write a check to the individual. Thus, the individual draws no attention to himself, and can deposit his check into a bank account without drawing suspicion. Another method involves establishing a business whose cash inflow cannot be monitored and funneling the small change into this business and paying taxes on it. All bank employees however are trained to be constantly on the lookout for any transactions which appear to be an attempt to get around the currency reporting requirements.
By the strictest definition of the term, anyone who assists in concealing the proceeds from his transactions is considered a money launderer. People are often thus employed unwittingly for money laundering, and they may still be criminally liable in many jurisdictions despite being unaware. Large multinational financial institutions have established private banking businesses to aid wealthy individuals who do not wish to reveal the details of their transactions.
The term "money laundering" is said to have evolved from the Prohibition era in the United States. Many methods were devised to disguise the origins of money generated by the sale of then-illegal alcoholic beverages. One method was legal gambling via slot machines—a way to efficiently transform giant volumes of coins into easily moveable currency. Another business so employed was laundries, and from this particular aspect of the trade, the term "money laundering" emerged.
