Money laundering is the process of making illegally-gained proceeds (i.e., "dirty money") appear legal (i.e., "clean") . It involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Criminals engage in money laundering to avoid prosecution, taxes, and seizure of their assets. Money laundering is a serious financial crime that is employed by white-collar and street-level criminals alike. 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 wiring or transferring through numerous accounts. This makes it difficult to trace the original source of the funds.

• Integration: The "clean" money is reintroduced into the economy, often through legitimate businesses or investments.

Money laundering can have devastating social consequences, as it provides the fuel for drug dealers, terrorists, arms dealers, and other criminals to operate and expand their criminal enterprises. Money laundering also threatens the integrity of the financial system. Most financial companies today have anti-money-laundering (AML) policies in place to detect and prevent this activity.