Money laundering is the process of transforming the earnings made out of crime into seemingly legitimate money or other assets. However, in a number of legal and regulatory systems, the term money laundering has become synonymous with other forms of financial crime, and sometimes used more generally to include misuse of the financial system involving things such as securities, digital currencies,  credit cards, and traditional currency, including terrorism financing and fudging of international sanctions. Most anti-money laundering laws dig into finding source of funds and destination from where the money in pumped in the system. These days we see that one of the aims of money laundering is to finance terrorists’ activities. In the common sense, money laundering means converting money acquired through illegal means where taxes are not paid, profits from selling illegal goods/services into legally-acquired income.

Anywhere between $500 billion and $1 trillion money is laundered worldwide every year. On the socio-cultural end of the successful laundering money means that criminal activity actually does pay off. This success encourages criminals to continue their illegitimate schemes because they get to spend the profit with no consequences. This means more fraud, more corporate misuse (which means more workers losing their pensions when the corporation collapses), more drugs on the streets, more drug-related crime, law-enforcement resources stretched beyond their means and a general loss of morale on the part of legitimate business people who don’t break the law and don’t make nearly the profits that the criminals do. The economic effects are on a broader scale.

Developing countries often bear the burden of modern money laundering because those governments are still in the process of establishing regulations for their newly privatized financial sectors. This makes them a prime target. In the 1990s, numerous banks in the developing Baltic States ended up with huge, widely rumoured deposits of dirty money. Bank patrons proceeded to withdraw their own clean money for fear of losing it if the banks came under investigation and lost their insurance. The banks collapsed as a result. Other major issues facing the world’s economies include errors in economic policy resulting from artificially inflated financial sectors. Massive influxes of mucky cash into particular areas of the economy that are desirable to money launderers create false demand, and officials act on this new demand by adjusting economic policy. When the laundering process reaches a certain point or if law-enforcement officials start to show interest, all of that money will suddenly disappears without any predictable economic cause.

Some problems on a more local scale relate to taxation and small-business competition. Laundered money is usually untaxed, meaning the rest of us ultimately have to make up the loss in tax revenue. Also, legitimate small businesses can’t compete with money-laundering front businesses that can afford to sell a product for cheaper because their primary purpose is to clean money, not turn a profit. They have so much cash coming in that they might even sell a product or service below cost.

From where does the dirty money come? Money is obtained from certain crimes, such as extortion, insider trading, drug trafficking and illegal gambling.  It needs to be cleaned to appear to have been derived from legal activities so that banks and other financial institutions will deal with it without suspicion. Money can be laundered by many methods, which vary in complexity and deception. Different countries may or may not treat payments in breach of international sanctions as money laundering. Some jurisdictions differentiate these for definition purposes, and others do not. Some jurisdictions define money laundering as disguising sources of money, either intentionally or by merely using financial systems or services that do not identify or track sources or destinations.

Other jurisdictions define money laundering to include money from activity that would have been a crime in that jurisdiction, even if it were legal where the actual conduct occurred. There are smart financial brains involved in laundering money in the world.

Stages of money laundering:

Placement: This involves physically placing illegal money into the financial system or the retail economy. The “dirty” money is most susceptible to detection and seizure during placement.

Layering:  means separating the illegally obtained money from its source through a series of financial transactions that makes it difficult to trace the origin. During the layering phase of money laundering, criminals often take advantage of legitimate financial mechanisms in attempts to hide the source of their funds.  Few of the many mechanisms that are used are  currency exchanges, wire transmitting services, prepaid cards that offer global access to cash via automated teller machines and goods at point of sale, casino services and domestic shell corporations lacking real assets and business activity that are set up to hold and move illicit funds.

Integration: The final stage is converting the illicit funds into a seemingly legitimate form. Integration may include the purchase of businesses, automobiles, real estate and other assets.

A common way of legalizing illicit funds is by setting up various businesses that exist for the sole purpose of blending dirty money with legitimate incomes. While the companies set up are legal in nature and can operate like ordinary businesses, they can overstate their income, which comes from over-invoicing to allow inflow of ‘dirty’ money. Businesses that are on cash basis like nightclubs make the inflow even more difficult to trace. Shell companies (a company without active business operation of significant assets) that are set up without any significant assets or operations can also be used for money laundering. These companies simply create fake transactions similar to normal businesses to allow inflow of cash. The funds can be cycled in a few more companies before reaching your pocket as legitimate cash. Other common sources are chain of convenience stores and ironically even banks, and yes antique stores and art galleries, spa, salons, fitness clubs etc.  These are all business that regularly transact business in cash and that are highly prized by people wishing to conceal the origin of their funds.

If the type of money is in large denomination, then discounting trade is the best business. Example would be to buy goods and sell them at 5%-10% lower.
For electronic money or money that is black or grey in a system, there are literally 100s of ways to whiten the money. These days, off-shore channels are used to whiten the money by investing in investment vehicles in other countries, specifically to whiten money. This is called an amnesty scheme (to bring more people into the tax bracket). A lot many people, who are aware of such avenues, regularly take advantage of it.

Over the past several years the banking industry, financial institutions, and the financial services industry have made significant improvements in detecting money laundering and preventing it. However, they continue to be susceptible to misuse by criminal elements for laundering illegally obtained profits and funds intended to finance terrorist activities. Money-laundering methods have become more creative; the criminals are intelligent people and some are highly qualified, their strategies for money trafficking cannot be challenged.   In the early nineties money laundering became prominent business due to the expansion of markets, cross border business alliances, more products and services, more difficult financial relationships, advances in technology, and the increased pace of money flows worldwide. The more technology advances, the more people find loopholes in the system. The entire world requires to come together to prevent money laundering. Is the world ready for transparency and precision? This is the most important question which needs to be answered.

It is extremely important to invest your time, efforts, money, and energies in the specialization of your choice. Many of us are good at many subjects. And, many of us try to get adjusted in an area of specialization and try to ‘fit’ into it all through our professional lives. Specialization is a specific area in which you can make a career. When you chose a profession which gratifies your passion, you are the most fortunate person on earth. And, therefore, it is a wise decision to invest in a career of choice.  When we get career in which we find our passion our existence becomes very fascinating.

As Confucius said, “choose a job you love and you will never have to work a day in your life.” It’s great advice, but it’s not always that simple. It is very difficult to figure out what we love, and how to change that liking into a career. There are many elements one needs to weigh before entering a job. A friend of mine who is very knowledgeable in the area of finance; he has loads of information in the stock market, banking, FDI, accounting, behavioral finance so on and forth. But he does not like to talk and does not like elucidation of concepts. Now this gentleman is a lecturer in a college. Because he does not like talking too much and explaining things in details, he obviously does not make a good teacher. Very few students attend his lectures.

A famous physician practices in heart of the city. He is famous for his diagnosis and prognosis. The problem with this physician is – he gets hyper when his patients ask him more than two questions. He feels his patients should listen to him and obey his instructions. He does not listen much to what patients speak; each patient has some or the other question regarding diet, after effects of medicines, life style, sleep etc. He does not like to listen. He breezes into the exam room with his own agenda and hardly has the time to find out what the patient expects. This common complaint his patients have. Therefore, he is considered as a conceited man.

Matching up our personality with a suitable role is extremely vital to our career. In fact it can become a career challenge. Our personality has so many facets; most of the times we fail to break it down into separate traits. And, even if we are aware of our characteristics, it’s important to know which jobs they’re suited for. I mean, how many people know which career is appropriate for which personality type. Often we have knowledge of one or two careers.

The present trend of education in universities is that students study degrees that sound highly, and at times narrowly vocational. Nevertheless, the trend of students opting for traditional subjects, such as History, English Literature and the Natural Sciences, Commerce is not wiped out completely. Many universities still regard themselves as seats of pure learning. I frequently think is it still sensible and desirable to study for love of a subject alone? On a second thought, a person can get trained up in a job rest of his life, whereas the time you spend in university is the only time in your life when you can study purely because you enjoy it.

Look at the recent changes in the global job market people do not shy away from changing and hopping into new jobs. The old traditional philosophy of sticking and retiring from one job is disappeared. In today’s job market very few people experience the stability of working for only one or two employers throughout their careers. In fact, most workers entering their first job today will change career paths at least seven to ten times before they reach retirement age.
With workers hopping from one job to other, more frequently very few companies can afford to invest heavily in into employee training and development. Therefore, more and more employers prefer job seekers to develop their own skills before joining a company. As a result, the demand for workers with college degrees has skyrocketed over the past few decades. I want to bring the point of loving your work, loving your career, doing what you love to do. Then job hopping is out of question.

Therefore, one needs to invest a little time and energy before taking decisions about career.

1. Make a list of your interests.
2. Make an honest list of your personal characteristics and your talents.
3. At the same time, make a list of your limitations and things which bore you to death.
4. Carry out some research about what kind of life style each of your interests might bring if it would turn to a job. Gather details in order to build up a realistic image of those professions.
5. Talk to people who have been in those professions for years. Gather the present trends in those particular professions.
6. Now take some more time and try to remember what you loved as a child. Often, our truest passions emerge in childhood. We stifle our childhood passion as we grow older by real life pressures. So think about what you loved in your childhood, what made you happy – was it mathematics, numbers, puzzle solving, reading stories, making collage, drawing, singing, scientific research, navigation, being close to nature…..what was that made you happy. Try to remember. Getting back in touch with those instincts is an important step in finding your passion.
7. Pease remove the materialistic element from your passion. Please don’t let the financial objective spoil your choice. While we all know money can’t be ignored, but don’t allow money dictate your choices. Listen to what your heart is saying.
8. Discuss about your thought process with your best friends who know you well. Sometimes you might not be able to make up our mind. You might misjudge your own decisions. Ask the people who know you personally, they might tell you when you seem the happiest and what you do most enthusiastically. Their answers might surprise you. Listen to your friends.
9. While choosing your educational programs check which subjects scare you to death, which ones do you find boring, whether you would love wasting your time studying them, Think, think and then decide on the choice.
10. Identify your professional hero. We all like one of the professions; we imagine being in it and hero-worship the topper in it. Whom would you most want to emulate? Reach out to him/her to learn more about how that person got to where he is.
11. In short, think of what you enjoy the most. Focus on things that you both enjoy and do well. It could be cooking, gardening, teaching, singing in opera, acting in drama, handicraft, painting …………… it could be from the funniest sounding thing to very serious sounding topic such as aeronautics or medicines. Don’t bother what others would think of you. Follow your heart.
12. Make a list of the top three or four profession which fascinate you; narrow the list to the top one thing. Keep it handy, review it often, and use it as your jumping-off point when you’re plotting your career move.

The movie ‘3 idiots’ gives the same message: chose a career which allows working with passion, believe in yourself, chase excellence and success will follow you automatically, and most important sometimes be idiotic it helps you to bring in the best in you.