This month we are focusing on: Money Laundering
And this week are looking at: What is Money Laundering?
Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source. The money from the illicit activity is considered dirty, and the process “launders” the money to make it look clean.
Some examples how this is done:
• Transferring money from one place to another
• Breaking up large amounts into smaller bank deposits
• Purchasing money orders in smaller money amounts
• Breaking the cash into small amounts and purchasing cashier’s checks
• Investing in some policies
• Terminating the loans early from the actual time
The government has become increasing vigilant in its efforts to combat money laundering over the years by passing anti-money-laundering regulations. These regulations require financial institutions such as accountants, to have systems in place to detect and report suspected money-laundering activities.
In this series of tax tips we will be looking at how this can affect the every day business person…you!