Money Laundering

turning money acquired illegally to legal money via illegal methods, legitimizing money that was either acquired illegally or that taxes were never paid on it

Money laundering, the metaphorical "cleaning of money" with regard to appearances in law, is the practice of engaging in specific financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of underground economy. In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting. As a result, the illegal activity of money laundering is now recognized as potentially practiced by individuals, small and large businesses, corrupt officials, members of organized crime (such as drug dealers or the Mafia) or of cults, and even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.
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Noun
1. concealing the source of illegally gotten money
(hypernym) concealment, concealing, hiding

A three-stage process which disguises illegal profits without compromising the criminals who wish to benefit from the proceeds. This requires: first, moving the funds from direct association with the crime; second, disguising the trail to foil pursuit; and third, making the money available to the criminal once again with the occupational and geographic origins hidden from view (see also placement, layering).

The conversion or transfer of money, assets and property derived from criminal activities to apparently legitimate status by disguising their origin through a variety of financial manoeuvres.

•Measures were taken in 2000 to tighten national laws and lift banking secrecy. (See External dimension, Judicial-criminal: Economic and financial offences)

•EU measures against money laundering include a Convention to Protect European Communities Financial Interests and the creation of a European Anti-Fraud Office. (See Organised crime: Money laundering, Police)

•Reports: The Commission monitors the implementation of different EU instruments by means of reports on the measures taken by Member States to comply with them.

•Making it difficult for organised crime to benefit from illegal gains is central to EU efforts to reduce illegal drug supply. (See Drugs)