Question

Investing distanced funds or assets in further criminal activity is known as which stage of the money laundering cycle:

Option 1: Placement
Option 2: Layering
Option 3: Integration
Option 4: Detection

Answer 1

The correct answer is Option 3: Integration. This stage involves reintroducing the laundered funds into the economy as legitimate assets and is often used for further criminal investments.

Step-by-step explanation:

Investing distanced funds or assets in further criminal activity is known as the Integration stage of the money laundering cycle. The money laundering process typically consists of three key stages:

• Placement: The act of introducing illegally obtained funds into the financial system by breaking them into smaller sums or investing them in a variety of ways.
• Layering: The process of obscuring the origins of the funds through a series of complex financial transactions, making it difficult to trace the money back to its illegal source.
• Integration: The stage where the laundered money is reintroduced into the economy as legitimate funds and used for investment or other financial transactions. This is the stage where the funds are invested in further criminal activities, making Option 3 the correct answer to the student's question.