PRESENTATION

ON
MONEY LAUNDERING

PRESENTED BY
RAHUL KUMAR
ROLL NO. 11

WHAT IS MONEY LAUNDERING?

In other words, it is the process used by
criminals through which they make dirty
money appear clean or the profits of
criminal activities are made to appear
legitimate.

Process by which illegal funds and assets
are converted into legitimate funds and
assets.

MONEY LAUNDERING GENERALLY REFERS TO
WASHING OF THE PROCEEDS OR PROFITS
GENERATED FROM:

1. Drug trafficking
2. People smuggling
3. Arms, antique, gold smuggling
4. Prostitution rings
5. Financial frauds
6. Corruption
7. Illegal sale of wild life products and other specified
predicate offences
3
8. Kidnap and extortion;
9. Smuggling;
10. Fraud including credit card fraud;
11. Misuse of non-profit organizations and charities fraud;
12. Thefts and robbery; and

MONEY LAUNDERING ACT, 2002
Indian government considered necessary to have an Act
to prevent money-laundering and to provide for
confiscation of property derived from, or involved in,
money-laundering and for matters connected therewith
or incidental thereto, hence passed the

THE PREVENTION OF MONEY-LAUNDERING ACT,
2002, [Act No. 15 of 2003].
Section -3 defines money laundering
Section 4 provides for punishment for money-
laundering
Section -5 empowers the authority and enforcement
agency to attach the immovable property / movable
property.
Section 41 clarify that no civil court shall have
jurisdiction to entertain any suit or proceeding in respect
of any matter which the Director, an Adjudicating
Authority
THE MONEY LAUNDERING PROCESS
1. Placement
2. Layering
3. Integration



1. PLACEMENT
The initial movement of criminally derived
currency or other proceeds of crime, to initially
change its form or location to places beyond the
reach of law enforcement.

Placement: "Placement" refers to the physical disposal
of bulk cash proceeds derived from illegal activity.

FORMS OF PLACEMENT
Forms Depositing into
accounts via tellers,
ATMs, or night deposits
Changing currency to
cashiers checks or other
negotiable instruments of
Placement
Exchanging small bills for
large bills
smuggling or shipping out
side the county

2. LAYERING
The process of separating the proceeds of criminal
activity from their origin.. Disguising the origin through
the movement of funds through accounts and financial
institutions. The use of layers of complex financial
transactions; loans, letters of credit, investments and
insurance


3) INTEGRATION.
The third stage is called Integration. It represents the conversion
of illegal proceeds into apparently legitimate business earnings
through normal financial or commercial operations. Integration
creates the illusion of a legitimate source for criminally derived
funds and involves techniques as numerous and creative as those
used by legitimate businesses. For e.g false invoices for goods
exported, domestic loan against a foreign deposit, purchasing of
property and co-mingling of money in bank accounts.

Integration: "Integration" refers to the reinjection of the
laundered proceeds back into the economy in such a way that they
re-enter the financial system as normal business funds.

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THE PROCESS
ADVANTAGES FOR MONEY LAUNDERERS
1. Launder money
2. Make a profit
3. Commit other securities fraud

MONEY LAUNDERING EXAMPLES
Purchase of securities for short period of time
with no discernable purpose. Selling out
Wash trades match buys and sells in particular
securities
Transactions involving penny stocks, Regulation
S stocks and bearer bonds


Insurance
products, agents and companies
Money donations to PM funds, National
emergency fund, Forming educational institutions
and trusts.