Three Stages of Money Laundering

What this video covers

• The three stages of money laundering in exact order: placement (cash enters the system), layering (complex transactions obscure the source), and integration (clean money re-enters the legitimate economy)
• Why placement is the most vulnerable stage for the criminal, and how the $10,000 Currency Transaction Report (CTR) threshold creates the central exam trap
• Structuring (also called smurfing): breaking large cash deposits into sub-$10,000 chunks to dodge reporting, and why structuring is illegal even when the underlying money is completely legitimate
• Why structuring is always a placement technique, never layering, because it is about getting physical cash into the system
• Common layering techniques in the securities industry: rapid buying and selling through multiple brokerage accounts, wire transfers through shell companies, and converting cash into securities then flipping them
• Why rapid trading across multiple accounts is layering, not integration, because the goal is confusion rather than long-term economic use
• Why integration is the hardest stage to detect, and how know-your-customer procedures serve as the primary defense