Laundering Meaning: Definition, Examples, and Translations
๐ต
laundering
[หlษหndษrษชล ]
Definition
financial crime
Laundering refers to the process of making illegally obtained money appear legitimate. It typically involves three stages: placement, layering, and integration. In the placement stage, the illicit funds are introduced into the financial system, often through casinos or bank deposits. Layering involves separating the money from its criminal origin through a series of complex transactions. Finally, integration allows the now-clean money to be reintroduced into the economy, where it can be used without raising suspicion.
Synonyms
cleaning money, financial concealment, money laundering.
Examples of usage
- The bank was charged with facilitating money laundering activities.
- Authorities are cracking down on money laundering schemes.
- He was accused of laundering drug money.
- Preventing money laundering is a priority for many governments.
Translations
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Interesting Facts
Historical Context
- During the Prohibition era in the United States (1920-1933), organized crime figures laundered money through legitimate businesses like speakeasies.
- In the 1980s, drug cartels in South America became notorious for money laundering, using various schemes to hide their drug trafficking profits.
Legal Framework
- Many countries have laws against laundering, which include strict penalties to deter financial crime and protect the economy.
- International organizations like the Financial Action Task Force (FATF) work to combat money laundering and promote regulations among its member countries.
Pop Culture
- Movies like 'The Godfather' and 'American Gangster' depict money laundering as a key element of organized crime storytelling.
- TV series such as 'Breaking Bad' and 'Ozark' highlight the complexities and challenges of laundering money within their plots.
Psychology
- Research suggests that individuals who engage in laundering often rationalize their actions, believing they are not fundamentally harming society.
- The psychological disconnect allows offenders to compartmentalize their activities, viewing laundering as a business tactic rather than criminal behavior.
Origin of 'laundering'
Main points about word origin
- The word 'laundering' comes from the Old French word 'lavandiรจre', which means 'washerwoman', showing a connection between washing clothes and cleaning money.
- Originally, money laundering referred to the process of washing dirty clothes, metaphorically applying to making dirty money clean.
The word 'laundering' originates from the verb 'to launder', which means to wash. It was first used in the context of financial crime in the late 20th century, particularly in relation to efforts to disguise the illegal origins of funds. The phrase 'money laundering' gained notoriety during the 1970s when it became a central issue in discussions about organized crime and drug trafficking. The term embodies the concept of 'cleaning' dirty money, similar to how one would wash clothes to remove dirt. Its usage has expanded over time, especially with the rise of global financial regulations aimed at combatting the practice.