Money laundering is a process of bringing money earned through illegal sources like drug trafficking, financial fraud, tax evasion etc. into the financial system through series of transactions to disguise the illicit origin. And, make them appear to have come from legal source. The objective of money laundering process is to convert black money into clean funds and make the dirty funds appears to be proceed from legal activities.
Normally, a money launderer follows three stages of money laundering
1) Placement - The money launderer introduce his illegal proceeds into financial system
2) Layering - This stage involve converting the proceeds of crime into another form and creating complex layers of financial dealing to disguise the audit trail
3) Integration - This stage entails placing laundered proceeds back into the economy to create the perception of legitimacy