Question of the Week

Money laundering has become a specific concern in all legitimate financial institutions worldwide. Regardless of the exact means by which the attempt to launder the money, distinct phases have been identified. These are:

I. Placement
II. Intermediation
III. Layering
IV. Integration

a) II, III, IV
b) I, III, IV
c) I, II, III
d) I, II, III, IV

Answer:

The correct answer is b).

There are three phases to money laundering. Placement is the physical disposal of the initial proceeds of money derived from illegal activities. Layering involves the creation of a set of transactions--often with one financial institution in several jurisdictions--designed to confuse the single source of funds. Integration, the final phase involves placing the laundered funds, often along with legitimate funds, into financial institutions.