The process of concealing the origins of illegally obtained money by passing it through complex transfers and transactions to make it appear legitimate. It typically involves placement, layering, and integration stages to obscure the money trail.
The term emerged in the 1920s during Prohibition, when criminals used laundromats and other cash businesses to mix illegal alcohol profits with legitimate income. The metaphor of 'washing' dirty money clean became the standard legal terminology by the 1970s.
Money laundering got its name because criminals literally used laundromats to mix dirty money with clean quarters! The brilliant legal insight is that money laundering is often easier to prove than the underlying crime - Al Capone couldn't be convicted for bootlegging, but modern prosecutors could have nailed him for laundering the proceeds.
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