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.

INVESTOPEDIA EXPLAINS '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 >>
  4. Why do brokers ask for personal information before they make any trades?

    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's the difference between insider trading and insider information?

    Insider information is the knowledge of nonpublic material about a publicly traded company that may affect the stock's price. ... Read Full Answer >>
  6. Who sets the global standard to stop money laundering and how is it implemented?

    The Financial Action Task Force (FATF) sets the international standard for fighting money laundering. Formed in 1989 by leaders ... Read Full Answer >>
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