In general, money laundering is an act of transferring money gained from criminal or illegal activities. The money could change form into physical assets or other currencies to make difficult for the authority or law enforcement agencies to confiscate it. Money laundering could affect innocent parties, especially if they are unaware of the illegal origin of the money. In this case, the law stipulates that the person is guilty if he/she knowingly makes some transfer of money that has been obtained from unlawful activities. It is illegal to disguise and conceal the nature of the money, as well as its original source and ownership.

In the United States, the person could be sentenced to a fine twice the value of the involver transaction or up to $500,000, whichever is greater. The person could also be sentenced up to 20 years with or without paying the fine. In this case, if we are suspicious about the possible act of money laundering, we should avoid knowing about the transfer, transmission and transportation of the money. This could cause us to receive heavy sentences.

The transfer of illegal money can be facilitated with current technology, especially because global movements of goods, money and people have become so much easier. In fact, some bankers, accountants and lawyers willing provide services to corrupt clientele and criminal who have large amount of fund at their disposal. Organized crime groups benefits from various money laundering techniques. Differential regulatory implementations in each country could hinder detection and recovery of the money. Money launderers could take any discrepancy between regulatory systems in each country.

The common practice is to seek our less regulated locales to obtain safe havens from international anti money laundering laws. This can be an effective method to huge assets that can be diverted illegally by organized crime groups. Tax evasion and transnational criminal activity have encouraged the practice of money laundering. Financial organization should be watchful to avoid being involved unknowingly. It is better to provide law enforcement agencies and access pathway to examine possible money laundering practice in our system. Our willingness to report and provide access in the negotiation process could avoid us for being prosecuted.

Prevention works better when law and regulations are upheld. Sanctioning may end up causing embarrassment to major financial agencies, so it is important to perform prevention and management steps. This will allow the internal auditors to screen out any blatant violators.