Money laundering deals with the movement of cash without leaving the trace of evidence which may be used for investigation purposes. The process is mostly done with the intention that the government or any other interested agency may certify that the amount raises emancipated from real sources. There are various forms of money laundering.
Types of Money Laundering
Bulk cash smuggling
This involves directly smuggling cash and storing it into on banks in other countries. Most of the times the deposits are made into offshore accounts or in companies which promise upheld secrecy. Offshore accounts are account which are located on different regions from the depositor’s residence. Offshore account usually offer great security against local an political interference
This form of money laundering is also referred to as smurfing. In the form of money laundering, cash is usually broken into smaller amounts which are deposited in very small deposits. The sole reason is to delete all suspension of money laundering and avoid the anti-money laundering reports which are a requirement by the government. Money launderers may also choose some amount of cash in the purchasing of bearer instruments such as money orders which will be later deposited.
Conducting cash-intensive businesses
The method banks on business that will receive a great amount of their revenue as cash deposits. Money launderers may approach the businesses and partner to invest some of their money in cash. Most of this businesses operate legally and top up their daily earned cash with the money laundering cash. Businesses that operate deals that have no variable costs are best suited for this type of business. The most commonly used businesses include strip clubs, casino and car washes.
Conducting business with shell companies and trusts
The company are well known maintaining a higher level of secrecy and hiding the true owner of the banked money. The business always ascertains that the amount of money received is a true reflection of the company financial books of accounts and the business they deal with.
Purchasing of real estates and other inventories
Due to the high level of auditing conducted by the government with the goal to stop the illegal business, most of the money launderers have now shifted to purchasing real estates and investing the money in gambling activities. This is viewed to be the most booming form of investment that can generate the large sum of money at the end of a given year and at the same time conceal their identity.
The situation entails the money launders purchases shares in new banks and other financial institution. The goal here will be gain full ownership of the bank within given time periods or be majority shareholders who have a say in the operation of the company. In future, the money launderers will be in a good position to move their money without any form of scrutiny.
Ghost salaries is another form of money laundering that is on a rise globally. Money is used to pay ghost workers and the proceeds is shared to the main money launderers.