In this global era, trading, commerce, and banking are swift and easy. However, crimes such as money laundering have also become effortless to accomplish.

There are three main stages in carrying out money laundering: 1) placement; 2) layering; and 3) integration. These stages can be done simultaneously in the course of a single transaction, or they can be done stage by stage.

In the placement stage, ‘dirty’ money or property is transferred from the location where it was obtained and is then placed into the mainstream financial system. This is where illegally obtained money “splashes down” and come into contact with the financial system.

In this initial stage of money laundering, transporting the cash or property may involve traditional smuggling methods such as mailing it through express packages, or concealing it in cargo ships. To place illicit profits into the financial system, launderers deposit them into a bank account mixed with ‘clean’ income of a business, making it indistinguishable from the legitimately earned income of the business. At this stage however, money laundering schemes can be easily detected, and so launderers often resort to ‘smurfing’. This is done by breaking up large amounts of money into less conspicuous smaller amounts that are then deposited or converted into negotiable instruments at different financial institutions.

After the funds have entered the financial system, the second stage of money laundering takes place. In the layering stage, funds are moved to different locations and undergo a series of transfers from one financial instrument to another. During this stage, the cash or financial instruments are distributed through the financial system using layers of financial transactions such as wire transfers, shell corporations, and fictitious import/export transactions. These transactions are not done to make a profit, but to give illicit funds or assets an appearance of having legitimately been acquired. In this stage, it is ‘virtually’ impossible to distinguish laundered money from legitimate money.

In the integration stage of the money laundering process, the money that is incorporated in the commercial sphere during the layering stage is collected and recycled to the benefit of the launderer. During this stage, launderers are able to regain control over their illegally obtained funds. They might then choose to invest the funds into different business ventures, or just sell off valuable assets bought during the layering stage.

Money launderers could also use currency exchange houses, insurance companies, and casinos in disguising their illegal activities. They can even use phone cards and traveler’s checks as money laundering tools.

Without a doubt, the advancement of technology, and the introduction of personal computers and cellular phones, not only made commerce hassle-free. It has also allowed money laundering schemes to proliferate around the world.