A Beginner's Guide to Money Laundering Diane Francis - Business Insider
go to original October 9, 2014

Let’s say you have a little spare cash - a couple hundred grand, maybe a million - burning a hole in your pocket. Maybe you’ve come upon it through questionable means. Or maybe you would prefer to keep it out of the grubby hands of various tax authorities. Or you don’t want your spouse to know about it. Or your kids.

Fear not. With a little financial detergent, your dirty money can be rendered more or less untraceable.

It must be said that the flow of illicit capital is distorting the global economy, draining wealth from emerging nations and inflating the cost of assets in the developed world. Neither of which seems to deter people from doing it every day.

China leads the world in this ancient art. Between 2002 and 2011, some $1.08 trillion departed the country illegally, despite currency-control laws that require people to obtain a permit to exchange more than $50,000 a year worth of yuan into any foreign currency.

But this is a truly international pastime. During that same period, some $880.96 billion was spirited out of Russia, $461.86 billion left Mexico, $370.38 billion left Malaysia, $343.93 billion left India, $266.43 billion left Saudi Arabia, and $192.69 billion left Brazil. The total outflow, among 20 emerging economies, was $5.9 trillion, equivalent to $49 billion a month.

From corrupt politicians and drug cartels to tax cheats and alimony deadbeats, more or less everybody’s doing it.

Americans wishing to spirit their cash offshore are increasingly finding their efforts thwarted by Washington’s 2010 Foreign Account Tax Compliance Act, which requires foreign banks to turn over information about accounts held by US citizens. But plenty of avenues remain for the dedicated money launderer - particularly if he or she is willing to violate the law.

Check out the basics at Business Insider

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