Dirty money refers to funds acquired through illegal means. Since transacting with such money may cause suspicion or could directly lead to the apprehension of the criminals, such money is usually “laundered” first.
Money laundering refers to the process of transferring money or having it pass through various channels in order to make it appear as if such funds were acquired legally. One of the main objectives of money laundering is to mislead authorities and hide the source of such funds. Through money laundering, the identity of the “owner/s” of such funds is also hidden.
There are several techniques which are used for the purpose of laundering funds. These are employed by individuals, but on a larger scale, may also require the involvement of companies and corporate or government officials. Transporting funds in cash form are advantageous, as it does not leave a paper trail, but is often highly inconvenient, or even impossible. Using electronic means is therefore often necessary.
One of the most basic actions to be taken is the movement of the funds from one area to another, in order to distance these from the original crime committed and prevent association. The criminals may then take more action to cover their tracks. Once this has been done, the funds are made available for the use of the criminals.
However, even this final step has to be taken with care, shielding the instigators from all suspicion in relation to their acquisition of funds. At this point, the money should already appear to be “clean,” which simply means that the acquisition is made to appear legitimate.
