Money laundering

 Money laundering

 Money laundering is the illegal process of making a large amount of generated from a criminal activity appear as if it got created in a legal business. Criminals who engage in illicit activities such as drug trafficking use various techniques to make it look as if their money got acquired through legitimate means.

The techniques of hiding proceeds from a crime include transporting the money out of the country, purchasing a business for channeling funds or buying easily transportable valuables (1). The commonest market for money laundering service is by running a legal firm to make it appear as the money gets generated by the company. For instance, when a criminal organization owns a jewelry store, they may inflate the daily cash receipts to cover for illegal cash through the jewelry store into the bank account of the jewelry store. That way, money from criminal activities gets deposited into the bank account in the name of proceeds from the jewelry store.

Valuables such as gold and diamonds were and still are a market for money laundering. The criminals invest illegal money by buying the valuable minerals that can get easily transported and resold to recover the cash.

Another upcoming market for money laundering is the internet. Cryptocurrency such as Bitcoin has turned into a breeding ground for money laundering due to the anonymity of cash transfers. Also, money laundering can get done through online auctions, gambling and even virtual gaming. The proceeds from internet activities such as gambling are used as a disguise for illegal money.

Professional money launderers offer money laundering services. The professional money launderers act as consultants while others offer discreet services such as providing fake cash receipts or setting up sham companies with false documents (2). The work of the professionals involves controlling how illegal money comes in and making sure that their illicit activities run undetected by the law enforcers. Professional money launderers maintain a stable money laundering system to prevent detection of any unlawful and criminal activities. For instance, when a criminal organization uses a night club to “clean” their money, the work of the launderer involves making sure that the daily accounts of the club match the illegal money deposited in the bank by inflating the accounts book where the daily proceeds get recorded.

Covert commerce means discrete commercial activities due to their illegal nature. Overt business, on the other hand, means open commercial activities which are legal.

Covert commerce differs from open trade in plain sight since the first activity is illegal while the latter is illegal. Secret commerce takes the form of smuggling or trafficking (3). The most obvious place to run an overt commercial activity is in the plain sight of the public with compliance to the law (4). In that sense, covert and overt commerce are different from each other.

However, in money laundering, covert and overt commerce appear similar in the sense that they complement each other. For instance, a criminal organization that engages in drug trafficking. Drug trafficking is an example of commerce since it is an illegal commercial activity. The criminal organization, to launder its money, can set up a restaurant to “clean” illegal money. In this case, a restaurant is an open commercial place since it is legal and in plain sight. Therefore, the criminal organization can transfer illegal funds from their covert commerce via the restaurant which acts as their open source of income. As such, in the sense of money laundering, covert and overt commerce appear similar to each other.