What is the simplest way of money laundering? Read the article and you’ll learn the main points of this illegal case.
Money laundering is the most common way to make illegal money hide from inspectors. Read how does money laundering work.
How to money laundering works - stages
It is possible to find many ways of money whitening. But all this ways can be divided into three main stages:
- Placement of money. In other words it is reshuffle of illegal means with quite lawful ones to remove money on legal grounds in financial system.
- Concealment of income by their distribution on large number of accounts and other ways of capitalization by small volumes, that complicates or makes impossible at all to trace the primary source.
- Integration or start into turnover of completely legal enterprise of the owner that he could use to destination.
Listed points can change depending on character of means or be absent at all. Let's say if illegally gained income already is in non-cash form, then it isn't necessary to place them in addition anywhere to realize one of schemes of laundering. The same is with integration. After distribution of finances on a set of accounts, they can remain there for unlimited time and be used by parties.
Techniques are directed first of all to complication and hiding of traces, which could lead investigating authorities to primary source of receiving profit, that responsibility for money laundering hasn't fallen on the owner of capital. In the second turn, there is a problem of effective using of laundered money.
How anti money laundering works – ways
To describe all possible methods of laundering or to describe those, which are used now and haven't got under close attention of supervisory authorities, is simply impossible. Nevertheless the most popular and easy ways of money laundering - how it works - are known at the moment.
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1. Division of finances and structuring of capital. Such scheme has received a name evasion. The idea of this is that total amount of illegal money breaks into small parts, for example 5-10 thousand dollars to place them separately in the form of various financial instruments, having used services of intermediaries. In particular, money laundering through cash cards is used. Such way is focused on the fact that small sums simply don't fall under close attention of supervisory authorities, which can't physically capture all cash flow.
2. Smuggling. Such way makes some restrictions on way of realization. Cash at the same time physically goes through border, from state with high extent of control of financial streams to the country with minimum restrictions. After that, partly or entirely money is placed on faceless bank account, offshore or addressed to intermediary and after that the laundered money transfers by bank and moves back to the target country for use.
3. Combination or mixing. Money received with illegal way can be added with small shares to lawful income, that to divide them subsequently for the analysis wasn't possible. Any enterprise working with cash, at which profitability isn't directly dependent on constant expenses, can act as lawful business, with which it is possible to mix illegal money. The income separately consists from a set of small payments. For example, for this scheme car wash, parking, laundry, many enterprises of the sphere of private services and sports clubs are perfectly suitable.
4. False accounts. This is option of mutually beneficial cooperation. At the same time one company, which has cash received unduly makes out a bill to one of contractors (most often to the individual entrepreneur) for provided lawful services from sphere of its activity. A bill is made out for surpassing sum. The difference is paid to the contractor in a cash form. As a result, part of finances arrives into official accounts of enterprise already laundered, and the second company, having received not considered cash, can lower its taxation and use finances for shadow actions. For example, auctions with selling objects of art or market of real estate are suitable for the greatest efficiency of this scheme, because prices of valuable objects can fluctuate in huge limits without drawing excessive attention at the same time.
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