By Dhananjay Choudhary - Money laundering is the transfer of money which is obtained illegally into a legal spot such as a bank or in a business. Illegal money obtained could be from criminal activity or any illegal means. This money is channelized into businesses or legit companies to cover up its origin and thereby escaping the authorities from illegal actions. This money indirectly returns to the launderer.
When any person attempts to hide or disguise the location, nature, origin, ownership or control of the criminal proceedings, it is termed as money laundering.
The crimes involved are the preliminary crime where the criminal profits and the secondary crime where the profit is tried to make legitimate by the exploitation of financial organizations.
Why it is Illegal?
Act of money laundering and the money source, both are illegal. It permits profit to criminals from the crime. It's illegal at each step of the process.
The Stages of illegality:
The Placement Stage- At this stage, crime begins to gets into the financial system. The crime can be in the form of loans with illegal proceedings, smuggled cash, cash for gambling and so on.
The Layering Stage- This is the phase where criminals slash the crime link with money. The transactions are layered so that the authorities are not able to get to the money source. This is done by fund transfers to several accounts or making them into small amounts by splitting and by transferring to different locations and various people.
The Integration Stage-Money obtained illegally is back to the criminal after several financial transactions. These transactions are integrated into the legal system. So thus the money obtained later can be utilized or their purposes.
Money laundering is done as huge sums of money obtained by the criminal through various illegal and criminal activities cannot be explained to HMRC and spent for their purposes. It can be detected with unpaid taxes and when compared to the employee wages, the assets are far over than earned. Lawyers such as Dhananjay Choudhary, a Delhi High Court Lawyer, has over ten years of experience in the field of money laundering. He has a strong understanding of illegal and fraud cases of money laundering. He has a law firm called Koda Associates that provide law services all through Delhi.
Authorities detect these red flags and carry out investigations and criminals are bound to get caught. To avoid money laundering several acts and rules also have been imposed. This is done to avoid criminal activities in the country and all over the globe which can pose a threat in many ways.
Agencies of Law enforcement of various jurisdictions have put up sophisticated systems to identify these suspicious criminal activities and transactions. Worldwide cooperative systems have been assisting each other for these endeavors.