Definition
There are three stages of money laundering where money gained through illegal activities is ‘cleaned’; placement, layering, and integration.
- Placement — Criminals find financial companies, pakihi, industries or professions lacking processes that flag suspicious activity or transactions, such as weak identity checks, or not asking for an income source. Their illegally gained funds are then introduced into a financial system, such as depositing small amounts into a financial account, buying assets, like shares, or using cash-intensive businesses, such as laundromats, or drop-in gyms .
- Layering — The criminal tries to disguise the source of the illegally obtained money by buying and selling assets, and moving it through a complex series of financial transactions, like wire transfers, currency exchanges, and buying expensive items, like boats and cars.
- Integration — Now that the money is 'clean', it’s reintroduced into the economy through activities like investing in legitimate businesses, or buying property.
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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