Money laundering
Money laundering is the process of disguising the criminal origin of money or assets so they appear legitimate and can be used or retained.
Placement, layering, and integration: A common model divides laundering into introducing illicit proceeds, obscuring their origins, and making them appear legitimate. This three-stage model describes the typical progression, though real schemes may combine or reorder stages.
Anti-money laundering: Anti-money laundering comprises laws, regulations, and controls intended to prevent and detect laundering. It is the coordinated response to the schemes described on this page.
Al Capone: Al Capone was a Chicago organized-crime leader convicted of federal income-tax evasion in 1931. His conviction is often linked in popular accounts to the phrase “money laundering,” though the phrase's history is more complex.
Predicate offense: A predicate offense is an underlying crime whose proceeds can give rise to a separate offense such as money laundering. Laundering cases depend on connecting assets to criminal proceeds, even when the underlying crime is prosecuted separately.
Structuring: Structuring is deliberately dividing transactions to evade legal reporting or recordkeeping requirements. It can conceal funds, but a reporting-rule violation is not by itself proof of money laundering.
Shell corporation: A shell corporation is a legal entity with little or no independent business activity or significant assets. Shell companies can conceal who controls assets or receives payments.
Know your customer: Know your customer is the process by which financial institutions verify customer identity and assess associated risks. Customer checks can expose false identities and suspicious account relationships.
Racketeer Influenced and Corrupt Organizations Act: The Racketeer Influenced and Corrupt Organizations Act is a 1970 United States law targeting patterns of organized criminal activity. RICO expanded federal tools against criminal enterprises and their financial operations.
Asset forfeiture: Asset forfeiture is the legal seizure or transfer of property connected to crime, subject to applicable law and procedure. Authorities may seek to recover assets identified as proceeds or instruments of laundering.
Embezzlement: Embezzlement is the fraudulent appropriation of property entrusted to someone's care. It can produce proceeds to launder, while laundering concerns disguising the proceeds' origins.