what is the simple and comprehensive definition to money laundring?

Answer 1

Moving money from illegal sources through a series of banks or businesses so that it becomes documented and accounted for and no longer has ties to illegal ventures.

That's the best I can do. It's kind of late here.

**EDIT**

Let me give you an example of a very common and simple money laundering scheme, which will help you understand how it works.

Mr. A has $1M worth of cash that he has collected from illegal ventures, like selling drugs on the street. He cannot put it into the bank or into other business ventures because he is not supposed to have the million dollars in the first place. The money is "dirty" because it came from an illegal source.

Mr. B agrees to launder the money. He has a small sized financing company with assets of $10M.

Mr. A give the $1M cash to Mr. B.

Mr. B, using all the appropriate legal paperwork, makes a loan to Mr. A in the amount of $1M, and puts in his own paperwork that his assets are now $9M, and that there is an agreement that Mr. A will repay the loan in ten equal payments of $100K each. He also adds in the paperwork that the interest rate on his loan is 10%, so the total of each payment he will receive from Mr. A is $110K. He takes $1M out of his bank, and puts the money in his private safe, or somewhere else where there will be no records. He gives Mr. A back his $1M. Because it has traded hands legally, there are now records showing where it came from.

Mr. A is now free to use the money for anything he wants, because it appears on paper that it is not illegally gained money, but actually money from a legal and legitimate loan. The money is now "clean" because it came from a "clean" source, the financing company.

Mr. A pays Mr. B, the launderer, $100K, which is his "cut" or share of the money, and is his charge for laundering the whole sum. Mr. B puts that money into his safe, not into the bank. When it is under his private control, there are no legal records kept aside from his own, so he can lie on his records, but everything looks legal to the government and to auditors.

Over the course of the next ten months, Mr. B puts in his records that he is receiving a payment each month in the amount of $110K from Mr. A. Each month, he takes $110K from the safe, and deposits it into his bank account. The money appears legal because it is shown on the books as being a payment on a loan, just as agreed in the original loan documents. Of that amount, $100K is his own money which he put away in the safe, and $10K is money which was given to him by Mr. A.

At the end of ten months, Mr. A has done whatever he wanted to do with his newly "clean" money. There are records showing that he received $1M from Mr. B's financing company, and also that he made regular payments to pay back the loan.

Also, Mr. B's books now balance out. He has received regular payments, and taken cash from his safe each month and deposited it into the bank. Each month, $100K was his own money, and $10K was money given him by Mr. A. His assets in the bank now equal $10.1M, which reflects that he was paid interest on the loan he made to Mr. A, and that Mr. A paid the money back properly.

The most important thing is that they started out with $1M which was "dirty" and came from undocumented sources. Now, every penny of that money has been documented and accounted for, and is "clean."

Traditionally, the biggest problem with money laundering is where to hide the illegal money while it is being laundered. Since the amounts of money being handled are absolutely enormous, and not always in cash, other than at the outset, hiding the money can be a problem. If someone makes a cash payment every month of $110K, the government gets suspicious. For that reason, the money is often put in "offshore" banks, or banks in Switzerland, which don't divulge their information to anyone, and keep all transactions private. Usually, when people get caught in a money laundering scheme, it is the person who is doing the actual laundering (in my example, Mr. B, the financier) who gets caught. They are the ones who run the biggest risk because they are the ones who have to figure out how to move the money around to make it look like it's legal.

The example I gave you is one of the simplest and oldest money laundering schemes. New money laundering schemes are incredibly complex, with money moving all over the place and through dozens of hands, all to create a paper trail that makes the money look like it came from legal sources.

Answer 2

A method used to cover up the origin of cash money in someones possession~~

Answer 3

The process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.