The three stages: placement, layering, integration

Money laundering is traditionally described in three stages, though real cases don't always follow them neatly or in order.

Placement

Getting the criminal proceeds into the financial system in the first place, for example depositing cash, purchasing assets, or wiring funds into an account.

Layering

Moving the money through a series of transactions, often across accounts, entities, and jurisdictions, specifically to obscure its original criminal source. This is where complex structures, shell companies, and rapid transfers between unrelated accounts often show up.

Integration

Bringing the now "layered" money back into the legitimate economy, buying property, investing in a business, or simply spending it, in a way that appears to have a legitimate origin.

Understanding these stages helps explain why some transactions or structures look suspicious even when no single element is obviously illegal on its own.