Certified Fraud Examiner 2025 – 400 Free Practice Questions to Pass the Exam

The first stage of money laundering is placement. This stage involves introducing illicitly gained funds into the financial system to obscure their illegal origin. During placement, the goal is to distance the money from its source by depositing it into banks, using cash-intensive businesses, or purchasing assets. This is a critical step because it sets the process in motion, allowing the launderer to begin the concealment of the money's origin.

In this stage, the launderers often take steps to avoid detection by financial institutions and law enforcement, which might include breaking large sums of money into smaller deposits or using third parties to make deposits. By successfully completing the placement stage, the funds are then primed for the subsequent stages of layering and integration, where further efforts are made to obscure their origins and eventually make them appear legitimate.