Layering is a key step in money laundering, used to disguise the origin of illicit funds and make them appear legitimate. This involves a series of complex financial transactions that obscure the connection between the dirty money and the source of the crime.
Here are some common examples of layering in money laundering:
- Electronic fund transfers between countries and into and out of offshore bank accounts: This involves moving money across borders through multiple accounts, making it difficult to trace the original source.
- Moving funds between several banks: Launderers might move funds between multiple banks, often in different jurisdictions, to further complicate the trail of money.
- Moving funds between multiple accounts within an institution: The money can be moved between different accounts within the same bank, such as checking, savings, and investment accounts, to further obscure the source.
- Using shell companies: Shell companies are legitimate-looking businesses created for the sole purpose of concealing the origin of funds. They provide a seemingly legitimate front for money laundering activities.
These examples demonstrate how layering techniques are used to create a complex web of transactions, obscuring the true source of the funds and making it difficult for authorities to track the money trail.
