Money laundering refers to the process of converting illegally acquired funds into supposedly legal funds. The main objective of money laundering is to "clean" the money so that it cannot be identified as illegal by law enforcement authorities and thus can be integrated into the normal economic system.
The process of money laundering typically involves three steps: First, the illegal money is introduced into the economic system, often through deposits at banks or through the purchase of assets such as real estate or jewelry. Next, the assets are manipulated to disguise their true origin, for example by transferring money between different accounts or by buying and selling assets through front companies. Finally, the "pure" money is returned to the economic cycle, often by investing in legitimate businesses or buying assets such as real estate or art.
Money laundering is a serious crime because it can help support illegal activities such as drug trafficking, terrorism, and corruption. International conventions and laws exist to combat money laundering, enabling law enforcement to prosecute and convict suspects.