Negosentro.com | Keeping It Clean: 4 Examples of Money Laundering and Why This Unethical Practice Must Be Stopped | Money laundering happens all the time and all over the world on both big and small scales. The act of money laundering, simplified, is the process of concealing or hiding money that is generated through illegal means and processing the money in a certain way that makes it seem as though it’s been legitimately acquired or earned, and then used to make legitimate purchases with minimal questions being asked.
In many places around the world, especially the US and the UK, money laundering is on the rise, which is why we’re going to explore some examples of what money laundering can look like so you know what to look out for, as well as highlighting why it’s so unethical to do this.
- Casino Laundering
Perhaps one of the most common and most lucrative ways of money laundering, casino laundering is the basic process of taking ill-gotten cash into a casino, buying chips with it, and then cashing out. Of course, since the casino is transferring chips for money, it doesn’t really matter how much money you’ve played with, the money you get back when cashing out is seen as winning and then the money is legitimate.
In this case, it’s not. The casino is legitimate, it just seems that way. This way of laundering is unethical because it’s so hard to trace, and it rips off casinos. That may seem like a fair deal to some people since casinos may seem ethical, but on a large scale, the workers who rely on the casino to make a living to live and feed their families will be the ones missing out and taking the brunt of the damage.
- Real Estate Laundering
Another common form of laundering, this process is using cash to buy a property and then selling it as quickly as possible, thus making legitimate cash from illegitimate cash. Since the profits made from any sale is legal, the money the criminals have is then decriminalised.
If money is being transferred across country borders by buying property overseas, this is also money laundering if the government isn’t aware that’s where the money is going. To counter this, a FATF recommendation 16 is used.
Smurfing, which is sometimes known as ‘structuring’, is the process of breaking down large sums of money and depositing them in seemingly inconspicuous amounts. If you suddenly paid $100,000 into your account and someone asked where you got it, you’d get caught out. Breaking it down will prevent this from happening.
Banks have cottoned onto this trick a while back and will have measures in place that will flag these kinds of transactions.
- A Cash Business
Perhaps the most well-known form of money laundering is that of a cash business. Simply put, this is any business that takes cash, such as a car wash, launderette, strip club, and more. Since there are no card transactions to monitor, the cash could come from anywhere, and the company can just say they had a lot of cash coming in, although usually, some sort of records will need to be kept.
Money laundering is incredibly damaging. While maybe not in small amounts, on the grand scale of things, millions of dollars of tax are lost to money laundering, money which could be spent on health and public services. If you’re a business, you won’t want to get caught with a money launderer, so make sure you’re always looking out for the signs.