What are the three recognized stages of money laundering?

What are the three recognized stages of money laundering?

• A. Initiation, Development, Completion.
• B. Placement, Layering, Integration.
• C. Sourcing, Filtering, Realization.
• D. Ingestion, Transformation, Distribution.

Answer: (B)

Understanding the three recognized stages of money laundering helps you see how illicit funds are moved to hide their origin. The three stages are placement, layering, and integration. In the placement stage, illicit sums enter the financial system, often through banks, casinos, or real estate transactions. In the layering stage, those funds are separated from their source via a complex series of moves—transfers, shell companies, multiple accounts—designed to obscure the trail. In the integration stage, the now-clean money is reintroduced into the economy as apparently legitimate wealth, such as investments, purchases, or business reinvestment. The other options use terms that don’t describe the standard sequence of concealment and reintegration, so they don’t fit the established model.

Understanding the three recognized stages of money laundering helps you see how illicit funds are moved to hide their origin. The three stages are placement, layering, and integration. In the placement stage, illicit sums enter the financial system, often through banks, casinos, or real estate transactions. In the layering stage, those funds are separated from their source via a complex series of moves—transfers, shell companies, multiple accounts—designed to obscure the trail. In the integration stage, the now-clean money is reintroduced into the economy as apparently legitimate wealth, such as investments, purchases, or business reinvestment. The other options use terms that don’t describe the standard sequence of concealment and reintegration, so they don’t fit the established model.