What are the 3 stages of Money Laundering?

In order to put that illicit money into use, the criminals try to hide the source and legalise it. The placement stage of money laundering deals with cases where illicit money gets introduced into the legitimate economy by way of cash deposit into a bank, money muling, currency exchange, etc. The placement stage of money laundering is full of challenges for the criminals as it involves placing money into the legal system without causing any suspicion.

In the layering stage of money laundering, the criminals try to create complex layers around the money put into the legitimate system. They change their form from one to another to avoid it’s detection. In the layering stage, criminals wire transfer money from one bank account to another across geographies. They also incorporate shell companies to add an extra layer of complexity.

The last stage of money laundering is Integration. Integration is the stage where the money is put to use for the intended purposes. Criminals buy real estate, make stock market investments, or buy luxury assets and integrate the ill-gotten money into the legitimate economy.