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Stages of Money Laundering


Money laundering is defined as the process of transforming the profits of crime and corruption into “legitimate” assets in an attempt to disguise the origin of the funds. The crime itself is divided into different stages.

Stage 1: Placement

The placement stage is where the cash is moved from its source. Occasionally, the source can be disguised or misrepresented. It is then placed into circulation through financial institutions, shops, or businesses. The placement process can also involve smaller procedures, including:

  • Currency smuggling
  • Bank complicity
  • Currency exchanges
  • Securities brokers
  • Blending of funds
  • Asset purchase

Stage 2: Layering

Layering involves increasing the difficulty of detection and uncovering laundering. It is supposed to make the trailing of illegal proceeds hard for law enforcement agencies to identify. This step can include cash converted into monetary instruments, such as money orders and banker’s drafts, and material assets bought with cash and then sold. Assets acquired through illegal funds can be sold locally or out of the country, which can make the original funds hard to trace.

Stage 3: Integration

Integration involves moving previously laundered money into the economy through the banking system, so the money appears to be through normal business earnings. This step is not similar to layering because the integration process involves the money being detected as legitimate earnings. This stage can be done through the following:

  • Property dealing
  • Front companies and false loans
  • Foreign bank complicity
  • False import / export invoices

If you’re facing charges of money laundering, don’t hesitate to give our skilled Santa Barbara white collar crime lawyers a call. We are dedicated to providing our clients with an efficient and vigorous criminal defense. Money laundering is a serious crime that could lead to a federal investigation into your life and severe penalties, such as a sentence of up to 20 years in prison and/ or fines of up to $500,000 (or double the amount of money that was laundered, whichever is greater). Let us defend your rights and your freedom.

Contact us at (805) 467-6060 or fill out our online form to schedule a free case consultation today. We look forward to speaking with you.

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