Money Laundering: A Historical Perspective

  • The amount of money laundered globally in one year is estimated at 2-5% of the global GDP, or between a staggering USD 800 billion – USD 2 trillion, according to United Nations Office on Drugs and Crime.
  • The expression ‘Money Laundering’ is of a fairly recent origin, with the term first appearing in the US in a newspaper in 1973.
  • The term “money laundering” owes its existence to Laundromats in the United States that were owned by the Mafia.
  • This was done by purchasing outwardly legitimate businesses and mixing their illegal earnings with the legitimate earnings received from these businesses.
  • But other historians differ from this version. According to them, money laundering is called so, because it perfectly describes how dirty money is put through a cycle of transactions, or washed, so that it comes out at the other end as legal or clean money.
  • In other words, the source of illegally obtained funds is disguised through a series of transfers and deals, such that those same funds can eventually be made to appear as legitimately earned income.

 

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