Money laundering





Money laundering
Money laundering is a process of disguising money that has been illegally obtained (or “dirty money”) so that it appears to be legitimate (or “clean money”). An example of this is when criminals take the proceeds from selling drugs or stolen goods and use it to buy legitimate assets like cars or real estate. Money laundering is a global problem. According to the United Nations Office on Drugs and Crime (UNODC), it is estimated that between 2 – 5% of the global GDP is laundered money. That’s about $800 billion to $2 trillion each year! To help prevent money laundering, banks and other financial institutions have to report large transactions (usually above $10,000) to the government. An analogy to help understand money laundering would be a criminal who wants to hide their identity. They might buy a car in cash, but they don’t want the car to be registered under their own name. So they pay someone else to register it and make it appear as if it belongs to that other person. Fun fact: Money laundering is not a new concept; it has been around since the 1700s!