Legal Definitions - laundering

Laundering is the act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced. This is also known as money-laundering, which is a federal crime. It is also addressed by state governments, and sometimes requires international cooperation.

Example 1: A drug dealer wants to hide the money he made from selling drugs. He gives the money to a friend who owns a legitimate business, and the friend deposits the money into his business account. This is an example of money-laundering.

Example 2: A corrupt politician receives bribes from a company. Instead of keeping the money in his personal account, he transfers it to a shell company in another country. The shell company then sends the money back to the politician in a way that makes it look like it came from a legitimate source. This is also an example of money-laundering.

These examples illustrate how money-laundering works. Criminals try to hide their illegal activities by making the money look like it came from a legitimate source. This makes it harder for law enforcement to trace the money back to its original source.