Finance: What are Anti-Money Laundering Laws?

What are Anti-Money Laundering Laws? Anti-money laundering laws are in place to ensure that illegal activities do not occur in the financial industry. They help to keep a fair market and make certain that proper tax practices are being used; they do this by outlining procedures that must be used by corporations.

College and CareerPersonal Finance
CoursesFinance Concepts
FinanceFinance Definitions
Financial Responsibility
Personal Finance
Finance and EconomicsTerms and Concepts
LanguageEnglish Language
Life SkillsFinance Definitions
Personal Finance
SubjectsFinance and Economics
Terms and ConceptsAccounting
Banking
Careers
Company Management
Ethics/Morals
IPO
Marketing
Regulations
Tax
Tech
Trusts and Estates

Transcript

00:27

9/11 with the hopes of trying to make it harder for terrorists to you know just

00:32

raise easy money to go do more terror... But ok here's a newsflash you're not [News headline on the TV about money laundering]

00:36

supposed to launder money. And no this isn't the joke about the fiver in the [5 dollars going around a washing machine]

00:41

dryer. Laundering in the financial sense refers to hiding money from the

00:46

government essentially or hiding taxable earnings. Illustrative example time! Well there are lots of ways to

00:52

launder in the good old days the system was very straightforward a bootlegger [People handing money to each other]

00:56

made a ton of money selling illegal alcohol but wanted to find another way

01:00

to show he had quote legitimately unquote made the dough so the [Quotes going either side of the word legitimately]

01:05

authorities wouldn't catch on. Well a theater could show a cheap film but [Police officer walking past a theater]

01:10

still be you know sold out yeah, yeah every seat was taken... So a bootlegger [Girl asleep in the almost empty theater]

01:15

would buy a movie theater and voila the theater business shows itself to be

01:20

hugely profitable with repeated sold-out showings of old Three Stooges black and [Cashier with his thumbs up holding two glasses of beer]

01:25

white movies and the bootlegging profits well they're now hidden, they're

01:29

disguised they're laundered as movie theater profits right. Well today money

01:34

laundering usually involves fake accounts, fancy transactions, all over the [Someone picking up a stack of money]

01:39

globe with computers doing a whole lot of talking and you know a bunch of

01:42

offshore accounts. Well the idea is the same though you create falsified

01:46

documents in some way called cooking the books to hide what you're doing from the [Printing out documents]

01:51

IRS and from the government in general. Well anti money laundering laws are out

01:55

there to catch people who do it and make sure that if they do cook the books well [Guy holding up a false document quickly tires to hide it from the police officer]

02:00

and then their goose is cooked too... [Guy in a cell with a goose]