Money laundering is the illegal process of making illegally-gained proceeds appear legal instead of ill-gotten. It involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Money laundering is essential for criminal organizations that wish to use illegally obtained money effectively. Criminals need a way to deposit money in legitimate financial institutions, yet they can only do so if it appears to come from legitimate sources. The process of laundering money typically involves three steps: placement, layering, and integration.

• Placement: The illegitimate funds are furtively introduced into the legitimate financial system. This is often done by breaking up large amounts of cash into smaller deposits and using different accounts, or by purchasing assets such as real estate or luxury goods.

• Layering: The money is moved around to create confusion, sometimes by transferring it between different accounts or jurisdictions, or by using complex financial transactions.

• Integration: The money is placed into legitimate business or personal investments, such as high-end luxury goods or another business entity.

Money laundering can be extremely complex, involving multiple individuals and transactions. There are a variety of ways to launder money, but all typically involve moving the money through a series of complex financial transactions in order to make it appear to come from a legitimate source. Money launderers often use techniques such as shell companies, offshore accounts, and money transfer services to conceal the moneys true origins.