What are the steps involved in money laundering?

The correct choice outlines the classic three stages of money laundering: placement, layering, and integration.

Placement is the initial step where illicitly obtained money is introduced into the financial system. This can happen through various means, such as depositing cash into bank accounts or purchasing assets. The purpose of placement is to separate the money from its illegal source.

Layering follows placement, where the goal is to obscure the origins of the money through a series of complex financial transactions. This can include transferring funds between different accounts, using shell companies, or converting cash into financial instruments. The layering process makes it challenging for authorities to trace the origin of the funds.

The final stage, integration, involves reintroducing the laundered money into the legitimate economy so that it can be used without suspicion. This can be accomplished by investing in legal businesses, purchasing real estate, or utilizing the funds for personal expenses.

Understanding these stages is crucial for law enforcement and regulatory agencies in detecting and preventing money laundering activities. Recognizing how money enters and moves through the financial system allows for more effective strategies to combat financial crimes.