Money Laundering

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money trafficking, crime rates, and organized crimes sky-rocket (“what is Money Laundering?”).

The Process

Money laundering is a process or a system of procedures which are systematically and scientifically rooted and is completed in three essential steps. These basic steps can be done independently in well distinguishable forms or in succession of the other steps. The three basic steps are placement, layering, and integration (Layton, 2006).

During the placement stage, illegally obtained moneys are deposited into legal bank accounts or invested in other legitimate areas. During the placement stage is where the most risk is involved because when large sums of money is deposited banks are required to report it to the appropriate governmental agencies. At the layering stage it involves sending money through varied financial transactions. By doing this you are obscuring where the money is from and making it more difficult to follow. Some of the layering forms used by the ...

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Laundering

Because of the vast amounts of money being laundered every year, the global effect is mind-blowing in economic, social, and security terms. Money laundering has the greatest effect on the economic aspect of a country. One of the major effects of money laundering on developing countries is the collapse of bank. Since developing countries are still in the developmental stages of establishing their financial sectors this makes them prime targets for money launderers. Banks that are rumored to have accommodated laundered money tend to collapse because their main depositors and customers who legally deposit their money become fearful that they may be labeled as money ...

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