1. MONEY LAUNDERING
By Sudipto Mallick
Acharya School of Management, B’lore
PGDM 2010-12

3. Money Laundering is the criminal practice of processing ill-gotten or “dirty
money , through a series of transaction; in this way the funds are
“cleaned”, so that they appear to be proceeds for legal activities.
In Common Man’s Language:
It’s a process by which money or other assets obtained as proceeds of crime are
exchanged for “clean money” or other assets.
Dirty Money
Clean Money

4. How It Is Done??

5. Money Laundering Process
Placement
Layering
Integration

6. Placement
The first and most vulnerable stage is placement. The goal is
to introduced the unlawful money into the financial system
without attracting the attention of financial institution or
law enforcement.
Ex: Dividing large amount of money into less smaller terms that are
deposited directly into different bank account.

7. Layering
Layering involves moving funds around the financial
system, often in a complex serious of transactions to create
confusion and complicate the paper trail..
Ex: Exchanging money in larger or smaller amount, or transferring
funds to numerous accounts in one or more financial institutions.
Acct 1, Bank C
Acct Acct Acct Acct
1, Bank A 1, Bank D 2, Bank B X, Bank Y
Acct 2, Bank B

8. Integration
The ultimate goal of money laundering process is integration.
Once the funds are in the financial system and insulated
through the layering stage, the integration stage is used to
create the appearance of legality through additional
transactions.
Ex: Purchase or resale of real estate, investment in securities etc.
Or funnel such money into various dummy firms and get repaid
through salaries, rent, leas on non- existing assets.

10. 18/10/2009
• Raj Rajanathram, a portfolio manager of Galleon group (managing $7
billion assets) has caught for allegedly raising fund for a Sri lankan terrorist
group ($1.5bl).
• This is the largest ever hedge fund insider case – the paper reported.
http://en.rian.ru/world/20091018/156506875.html

11. How to prevent??
Anti Money Laundering Laws
- The Prevention of Money Laundering Act, came into
effect on 1st July 2005.

12. Implementation-KYC Norms

13. World Check-BMR Advisor AML Survey
2009
• 168 banks in India including PSB, Private sector and Foreign Banks.
• An amount 13 times larger than the country's foreign debt - USD 1500
billion has been alleged to have been laundered
by Indians in Swiss banks

16. News Paper Article
http://www.business-standard.com/india/news/financial-institutions-need-
investment-in-anti-money-laundering-system/64974/on

17. SELF CHECK
Creating the Injecting illegal money Making a complex
appearance of into the system web of transaction
legality
1, 2, 3 3, 2, 1 1, 3, 2 3, 1, 2 2, 1, 3
None of the above 2, 3, 1

18. ANY ?????