Money Laundering is the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean.
Money Laundering is a serious financial crime that is employed by white-collar and street-level criminals alike. Most financial companies have Anti Money Laundering (AML) policies in place to detect and prevent this activity.
Money Laundering can be divided into three steps1):
There are two categories of Money Laundering:
Source: https://www.investopedia.com/terms/m/moneylaundering.asp