Dirty Money! Three Stages of Money Laundering

The video explains the three stages of money laundering: placement, layering, and integration. In the placement stage, illegal money is moved into the financial system. The layering stage involves disguising the origin of funds through complex transactions. Finally, the integration stage makes the money appear as legitimate income. Techniques like smurfing, using shell companies, and intermediaries are discussed to illustrate how criminals obscure the money trail.

What is the primary challenge criminals face when trying to spend large sums of illegal money?

• Finding a bank that accepts large deposits

• Hiding money in offshore accounts

• Avoiding attention and suspicion

• Converting cash into digital currency

Which of the following is NOT a method used in the placement stage of money laundering?

• Intermingling illegal cash with legitimate deposits

• Setting up shell companies

• Using businesses where cash is king

• Purchasing high-value goods for personal use

What is 'smurfing' in the context of money laundering?

• Creating fake invoices

• Making many small transactions below reporting thresholds

• Bribing officials to ignore illegal activities

• Using offshore accounts to hide funds

In the layering stage, what is the purpose of using trusts?

• To create a legitimate business front

• To invest in high-value goods

• To falsify the origin and trail of illegal money

• To evade taxes

How do shell companies assist in the layering stage of money laundering?

• By allowing funds to be deposited in lower tax jurisdictions

• By offering high-interest loans

• By providing a legitimate business front

• By converting cash into digital currency

What role do intermediaries play in the layering stage?

• They invest in real estate

• They provide loans to criminals

• They engage in transactions on behalf of the criminal client

• They create fake identities for criminals

During the integration stage, how is laundered money typically reintroduced into the economy?

• By depositing it into savings accounts

• Through the purchase of high-value items

• Through charitable donations

• By investing in small businesses