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As one of the most notorious gangsters[br]in history,

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Al Capone presided over a vast[br]and profitable empire of organized crime.

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When he was finally put on trial,

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the most he could be convicted of[br]was tax evasion.

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The nearly $100 million a year,

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that's 1.4 billion in today's currency,

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that Capone had earned from[br]illegal gambling,

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bootlegging,

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brothels,

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and extortion,

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would have served as evidence[br]of his crimes.

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But the money was nowhere[br]to be found.

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Capone and his associates had hidden it[br]through investments in various businesses

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whose ultimate ownership[br]couldn't be proven,

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like cash-only laundromats.

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In fact, those laundromats are part of[br]the reason for the name of this activity,

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money laundering.

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Money laundering came [br]to be the term for any process

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that cleans illegally obtained funds[br]of their dirty criminal origins,

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allowing them to be used within[br]the legal economy.

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But Capone wasn't the first[br]to launder money.

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In fact, this practice is about[br]as old as money itself.

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Merchants hid their riches from[br]tax collecters,

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and pirates sought to sell their bounty[br]without drawing attention

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to how they got it.

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With the recent arrival [br]of virtual currencies,

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offshore banking,

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the darknet,

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and global markets,

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schemes have become much more complex.

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Although modern money laundering[br]methods vary greatly,

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most share three basic steps:

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placement,

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layering,

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and integration.

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Placement is where illegally obtained[br]money is converted into assets

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that seem legitimate.

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That's often done by depositing funds[br]into a bank account

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registered to an anonymous corporation[br]or a professional middleman.

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This step is where criminals are often[br]most vulnerable to detection

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since they introduce massive wealth[br]into the financial system

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seemingly out of nowhere.

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The second step, layering, involves[br]using multiple transactions

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to further distance the funds[br]from their origin.

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This can take the form of transfers[br]between multiple accounts,

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or the purchase of tradable property,

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like expensive cars,

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artwork,

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and real estate.

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Casinos, where large sums of money[br]change hands every second,

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are also popular venues for layering.

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A money launderer may have their[br]gambling balance made available

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at casino chain's locations [br]in other countries,

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or work with the employees[br]to rig games.

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The last step, integration, allows clean[br]money to re-enter the mainstream economy

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and to benefit the original criminal.

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They might invest it into a legal business

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claiming payment by producing[br]fake invoices,

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or even start a bogus charity,

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placing themselves [br]on the board of directors

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with an exorbitant salary.

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Money laundering itself

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wasn't officially recognized as a federal[br]crime in the United States until 1986.

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Before that point, the government[br]needed to prosecute a related crime,

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like tax evasion.

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From 1986 on, they could confiscate[br]wealth simply by demonstrating

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that concealment had occurred,

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which had a positive effect on prosecuting[br]major criminal operations,

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like drug traffickers.

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However, a legal shift has raised concerns

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involving privacy [br]and government surveillance.

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Today, the United Nations,

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national governments,

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and various nonprofits

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fight against money laundering,

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yet the practice continues to play[br]a major role in global crime.

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And the most high-profile instances[br]of money laundering

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have involved [br]not just private individuals,

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but major financial institutions[br]and government officials.

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No one knows for sure the total[br]amount of money

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that's laundered on a yearly basis,

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but some organizations estimate it to be[br]in the hundreds of billions of dollars.