Glossary

Money laundering

Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy. Laundering often uses an apparently bona-fide company to "clean" the money for reuse. Those cleaning money may be happy to pay up to 20% of the value for the guarantee of making the money non-traceable. For example, purchasing goods from a company (using one account) and returning them for a refund (paid to a second company) can result in cleaned money if done correctly.

Money laundering now encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting. As a result, the illegal activity of money laundering is now recognized as potentially practised by individuals, small and large businesses, corrupt officials, members of organized crime (such as drug dealers or the Mafia) or of cults, and even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.