How Money Laundering Is Used By Criminal Enterprises

Money laundering is a criminal activity that occurs world-wide. It is often associated with the commission of other crimes. The activity is a $500 billion industry that keeps those in the criminal underworld in business. This paper will discuss what money laundering is. It will also cover how money laundering is used by criminal enterprises. The paper will also discuss the steps the United States uses to fight this type of crime.
Money laundering is defined by the Cambridge Dictionary as “the crime of moving money that has been obtained illegally through banks and other businesses to make it seem as if the money has been obtained legally” (Cambridge University, 2015). Most often it is used by those in the illegal drug trade to hide their illicit

This stage is when the money is put into a legitimate economy. “The funds now appear as clean and legitamate assets” (The World Bank, 2009, pg 5). An example given by the World Bank (2009) is that “the launderer may purchase an expensive house with a mortgage loan in which repayment is paid using the laundered money in a bank account. The launderer may also set up a business, such as a restaurant or a video rental shop, where the illegal funds could be injected into the business and reappear as fictitious profits or loan repayment. The launderer may also set up a web of front companies with fictitious import/export businesses and use false invoicing and fictitious transactions to integrate the funds as normal earnings from trade” (pg. 6).
The United States has several ways of investigating and prosecuting money laundering. In 2003, the United States Treasury Department along with the Justice Department released the 2003 National Money Laundering Strategy. This strategy went after money laundering that funded criminal activity and terrorism. “Although money laundering and terrorist financing differ in certain ways,1 they share many of the same methods to hide and move proceeds” (Department of the Treasury, 2003, pg

There are several key areas that the agencies used to obtain this goal. They are making sure that there is coordination with different agencies; empower law enforcement agencies to use financial databases and tools; focusing law enforcement personnel on targets and financial systems that are seen as a critical threat; using new statutory and regulatory authorities; insuring international cooperation between agencies; improving the interaction between the U.S. government and the financial community; and assisting state and local governments with their investigations of money laundering. (Department of the Treasury,