Money Laundering

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DEFINITION of 'Money Laundering'

The process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.

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BREAKING DOWN 'Money Laundering'

Some estimate the size of the problem is over $500 billion annually. Often thought of as a victimless crime, money laundering is a very serious issue. Without it, international organized crime would not be able to function.

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RELATED FAQS
  1. Why does fighting money laundering reduce overall crime?

    Money laundering is the process of converting funds received from illegal activities into ostensibly clean money that does ... Read Full Answer >>
  2. What methods are used to launder money?

    Money laundering involves three basic steps to disguise the source of illegally earned money and make it usable: placement, ... Read Full Answer >>
  3. If caught, what implications does money laundering have on a business?

    Money laundering is a multibillion dollar industry that impacts legitimate business interests by making it much more difficult ... Read Full Answer >>
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    According to the Securities and Exchange Commission (SEC), there are three main reasons why a broker will ask for personal ... Read Full Answer >>
  5. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
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    Inherent risk is the risk imposed by complex transactions that require significant estimation in assessing the impact on ... Read Full Answer >>

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