A:

Money laundering is the process of converting funds received from illegal activities into ostensibly clean money that does not raise suspicion from banks and financial institutions. Terrorists, organized criminals and drug smugglers rely extensively on money laundering to maintain cash flow for their illegal activities. Therefore, fighting money laundering is a highly effective way to reduce overall crime. Fighting money laundering uncovers financial records that often tie perpetrators to criminal activity. In cases of robbery, embezzlement or larceny, the funds uncovered during money-laundering investigations frequently are able to be returned to the victims of the crime. Additionally, taking away a criminal's ability to launder money hampers his operation by shutting off his cash flow.

In today's regulatory environment, extensive records are kept on just about every significant financial transaction. Therefore, when trying to uncover the identity of a criminal, few methods are more effective than locating records of financial transactions in which he was involved. Money laundering investigations center on parsing financial records for inconsistencies or suspicious activity; therefore, they often lead an investigator right to the front door of the criminal he's chasing.

Uncovering money laundering is also an effective crime-fighting tool in that it frequently helps restore stolen money or property to its rightful owner. For example, when money that was laundered to cover up embezzlement is discovered, it can usually be traced back to the source of the embezzlement. While this does not necessarily nullify the original crime, it puts the money in question back in the proper hands and parts it from the perpetrator.

Lastly, money laundering is crucial for a criminal to run a successful operation. The money he makes is no good if he cannot use it to finance his operation and lifestyle. Therefore, attacking that aspect of his operation is one of the most effective ways to take down the whole thing.

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