Money Laundering: A Three Step Secret Game

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Volume: 01 Issue: 01 | January-February 2023 | www.puiij.com
© 2023, PUIIJ | 10.5281/zenodo.7644399 Page | 34
Money Laundering: A Three Step Secret Game
Md Arman
MBA student, School of Business Administration, University of Asia Pacific, Bangladesh
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Abstract - This paper describes, theoretically, what money laundering is and how it is done following some
partnered activities over time. This paper also looks for electronic money laundering and found some
related and predefined functions which are completed using electronic gadgets and the Internet. To give
a clear view on money laundering, the author thinks that it is necessary to make it clear first about the
characteristics of money laundering, the reasons behind it, and how it creates negative impacts on the
business and economy of a country. In most nations, it is a crime and economically developed countries
built strong fortress against money launderers but laundering is not stopped. So, this paper tries to discover
out what and how the launderers launder and discover inventive ways to form their unlawful cash lawful
which the legal authority can not detect. This paper shows the step by step procedures of this globally
illegal money whitening activities mostly theoretically.
Keywords: Money laundering, electronic laundering, illegal characteristics, nations, economy.
1. INTRODUCTION
The term "Money Laundering" comes from the United States and refers to the Mafia's attempt to "launder"
illegal money through cash-intensive washing salons controlled by company acquisitions or business
formations (Schneider & Windischbauer, 2008). Money laundering happens outside of the typical range of
economic data by definition. However, as with other areas of illicit business activity, preliminary estimates
have been proposed to provide some measures for the situation. Illicit sources are estimated to account
for two to five percent of global GDP. According to 1996 data, the amount of money laundered varied
between 590 billion and 1.5 trillion US dollars. The lower amount is about similar to the value of the size of
Spain's economic output. A large amount of the revenue comes from drug dealing, prostitution, illegal arms
sales, smuggling, or any organized crime. Tax fraud, market manipulation, extortion, and cyber fraud
schemes can also generate huge profits, creating an incentive to "validate" illicit earnings through money
laundering. The majority of unlawful transactions are completed in cash since there is the least chance of
leaving one's mark; nonetheless, there is a clear trend to exploit the internet to conduct illegitimate
transactions in the form of Online Banking, Cyber Money, and Electronic Purse. The purpose of a huge
proportion of crimes is to make money for the individual or group who commits the act. Money laundering
is the processing of unlawful profits to conceal their illegal origin. Launderers take this procedure seriously
since it allows the them to earn without risking their source.
We have already entered into the new world of Artificial Intelligence (AI) where people are creating new
and innovative technological features to make both mental and physical job easier. Since the new ways to
launder money with the traditional methods are blended, it has been more difficult to figure it out the
culprits and their secrete activities related to money laundering. Where there is a problem, there is a
solution. Launderers are using technology, authorities are using models to detect it. Some researchers

described their own built models and others explained the previous models. The ultimate target is to detect
both electronic and traditional money laundering.
Although governments are pro-active to find the laundering, launderers are playing this secrete game with
huge amount of cash in hand and it is sometime difficult to identify them. Many countries in the world have
their own regulations against money laundering, several global institutions like United Nations are working
with the collaboration of governments to stop it but still the launderers are at large. Some previously
published literature and research were accumulated to find out the scenario of money laundering, process
and its effect on the economy. Meta-data analysis shows the results of three secrete steps of money
laundering which are placement, layering and integration, and the anti-laundering mathematical model
is also discussed based on some previously established literature.
2. LITERATURE REVIEW
2.1 Money Laundering
The phrase "Money Laundering" was coined after the Watergate Scandal in 1973 and is thus not a legal
definition but a colloquial term denoting the process of converting illicit funds into legal funds (Schneider
& Windischbauer, 2008). When an illegal endeavor yields significant earnings, the person or group engaged
needs to figure out a way to keep the cash under control without drawing attention to the underlying
activity or the individuals involved. Fraudsters conceal the sources, change the form, or they move the
money to an area where suspicion is less likely to be raised.
Germany’s Criminal Code Section 261 determines money laundering as “Anyone who conceals, distorts,
or jeopardizes the determination of the origin, the finding, forfeiture, confiscation, or seizure of an item
originating from a crime undertaken by another individual or an offense initiated by another individual or
a supporter or illegal affiliation is subject to imprisonment for up to five years or a fine” (Schneider &
Windischbauer, 2008). While in Austria, the launderer is defined as “Anyone who hides or uncovers the
source of assets”. Money laundering, according to current legislation in this nation, entails the procedure
of transforming illegally obtained funds to conceal their illicit origins. The goal of money laundering from all
property derived from illegal activity. So, the activities that directly defy the legal code, for example, and
other felonious transformation of money from illegal to make it legal funds can be defined as Money
Laundering.
2.2 Detecting Legal Definition
The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances
developed a transnational interpretation of money laundering in 1988, which was nearly universally
adopted by the world community, but limited to drug-related crime (Korejo et al., 2012). Money laundering
is a worldwide felony. According to the United Nations Convention against Transnational Organized Crime
(Palermo Convention) “The conversion or transfer of property, knowing that such property is the proceeds
of crime, for the purpose of disguising the illicit origin of the property or of helping any person who is involved
in the commission of the predicate offence to evade legal consequences of his/her action; the
concealment or disguise of the true nature, source, location, disposition, movement or ownership of or
rights with respect to property, knowing that such property is the proceeds of crime; the acquisition,
possession or use of property, knowing at the time of receipt that such property is the proceeds of crime;

participation in, association with or conspiracy to commit, attempt to commit and aiding and abetting,
facilitating and counselling the
commission of any of the offence established in accordance with this article” (Drugs and Crime, 2004;
Bar-ness, 2014).
According to the European Union Council Directive: (Directive, 1991), "Money laundering" is defined as the
following purposeful behavior:
▪ Converting or conveyance of assets with knowledge that such assets is obtained from illegal
conduct or from an act of involvement in such exercise, with the intent of hiding or camouflaging
the illegal origin of the assets or supporting any party involved in the agency of such action to
circumvent the legal implications of his/her action.
▪ The concealing or obfuscation of the real nature, origin, site, presentation, transportation, or
property rights, recognizing that certain assets is generated through unlawful acts or as a result act
of involvement in such crime.
▪ Acquiring, possessing, or using property recognizing, at the time it was received that certain wealth
was obtained from unlawful acts or from an act of engagement in these kind of conduct.
▪ Involvement in, affiliation to conduct, endeavors to commit, and assisting, condoning, promoting,
and advising the commission of any one of the above mentioned offence. Consequently result
conditions can be used to infer knowledge, intent, or purpose necessary for the aforementioned
actions. Money laundering is defined as such even if the acts that created the properties to be
laundered occurred on the jurisdiction of some other Individual Country or a foreign nation.
Money laundering is a crime in the United Kingdom under Section 327 of the Proceeds of Crime Act (2002)
(POCA). This section states “A person commits an offence if he or she conceals, disguises, converts or
transfers criminal property or removes it from England and Wales or Scotland or Northern Ireland; enters
into or becomes concerned in an arrangement which he or she knows or suspects facilitates the
acquisition, retention, use or control of criminal property; acquires, uses or has possession of criminal
property.” Aside from that, Section 329 of the POCA incorporates the purchase, usage, and ownership of
illegal assets as part of the money laundering offense. Furthermore, Section 330 of the POCA defines
conditions and subjects a person to money laundering responsibility if he/she is unable to disclose
questionable conduct to the regulating sector (banks and financial institutions) (Korejo et al., 2012).
In the United States, section 1956 of the US Code 18: “Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact involves the proceeds specified unlawful activity: with
the intent to promote the carrying on of specified unlawful activity; or with intent to engage in conduct
constituting a violation of section 7201 or 7206 of the Inland Revenue Code of 1986; or knowing that the
transaction is designed in whole or in part to conceal or disguise the nature of, the location, the source, the
ownership or the control of the proceeds of specified unlawful activity; or to avoid transaction reporting
requirement under State of Federal Law.”
However, it is an offense under Section 3 of Pakistan's AML Act (2010) (AMLA) and “A person commits a
crime if they purchase, convert, possess, use, or transfer property while knowing or having reason to believe
that it was obtained through criminal activity; they hide or disguise the true nature, origin, location,
disposition, movement, or ownership of property while knowing or having reason to believe that it was

obtained through criminal activity; they hold or possess property on behalf of another person while knowing
or having reason to believe that it was obtained through criminal activity.”
All of the aforementioned interpretations, nonetheless, seem to be correct; they are based on revenue,
ownership, illicit profits, and illegal conduct that are heavily rooted in felony characteristics. However, such
a suggestion is a poor characterization of the notion of money laundering, leading in an inadequate
understanding of the money laundering process. An examination of these traditional standards of money
laundering reveals that they are purposeful and involve a wide range of legal acts. All of the preceding
definitions of money laundering appear to embrace nearly any form of behavior, with "criminal
proceeds" coming under the scope of "money laundering" and thus considered liable. However, the
definition of "criminal proceeds" is excessively broad. As a result, comprehending the crime of "money
laundering" requires a grasp of the realm of criminal proceeds (Korejo et al., 2012).
3. METHODOLOGY
Qualitative research was conducted using meta-data from past research literature and scholarly articles.
To identify previous research studies for inclusion in the meta-analysis, the researcher searched several
databases, mostly business oriented using of related keywords: money laundering, process, anti-money
laundering, etc. The researcher is well aware of the content validity because it is one of the key concerns in
meta-data analysis (Schriesheim et al., 1993). The deductive approach was used to generate the list of
proposed items through the review of the previous literature (Aboul-Ela, 2014). The researcher specially
searched ResearchGate, CrossMark, and some publishing platforms like Springer, Elsevier, academia.edu,
Emerald Insight, and Sage Journals for relevant studies as well as doing a search through all available
EBSCOHost databases. The researcher also reviewed the reference lists of other summaries to identify
relevant articles missed in the computerized search.
Using these search procedures, the researcher randomly identified over 50 studies, then screened them to
determine their relevance. The researcher excluded some studies which are repeated in the topics. After
evaluating the studies based on the inclusion criteria, 16 studies and 5 reports were selected. All studies
included in the meta-analysis are appended in the reference section.
4. FINDINGS AND DISCUSSION
4.1 Characteristics of Money Laundering
Money laundering refers to any monetary assets (cash and electronic bank transfers) or their surrogates,
along with quasi-assets such as transportable items and real estate, that are created either directly or
indirectly from illegal actions or are designed for the implementation of such an activity. The process is
meant to launder illegal assets into lawful usage. The action is therefore distinguished by a malicious
intention to change, blend, move, redirect, and misrepresent the real origin or characteristics of
incriminated items intentionally and in a structured manner (Schneider & Windischbauer, 2008).
Korejo et al. (2012) mentioned that it may be split down to apply to three different categories of
characteristics. First, assets obtained as a result of illegal activity related to a specific offense. Second, the
worth of the asset in question, and finally, assets comparable in worth maintained inside the nation and
taken or held just outside of the nation. In other words, money laundering refers to the intentional creation
of all financial and non-financial assets obtained either directly or indirectly from any illegal behavior; the

former refers to cash money or soft-electronic fund transfer or their replacements, while the latter contains
portable commodities and immovable estates. Furthermore, such illegal activity is aimed to realize an
asset. Additionally, such illegal activity is aimed to realize an asset. As a result, acts are distinguished by a
criminal purpose to meticulously transform, blend, hide, and mislead the true source or form of the items
engaged in the unlawful activity.
As previously said, the resultant offences have been continuously extended to the crime of money
laundering; thus, it is essential to investigate this expanding worldwide legal mechanism combatting
money laundering.
4.2 Reason Behind Money Laundering
According to various estimates, the entire revenue of organized crime ranges from $500 billion to 2.1 trillion
USD. Some estimate that the global value of money laundering ranges from $400 billion to USD 2.85 trillion.
Money laundering is considered necessary by launderers because cash is used in practically all unlawful
transactions since it puts no transaction marks such as records or proof. Drug trafficking plays a vital role,
with a total income of $500-1,000 billion USD, amounting to about 9% of global commerce (The UNDOC
World Drug Report 2008). The illegal drug industry is massive in scope. The amount, assessed at market
prices, is greater than the GDP of 88% of the world's nations. These enormous sales volumes and earnings
from drug trafficking need to be laundered because one million USD in 20 dollar bills weighs around 55 kg;
the same amount in five dollar bills weighs 220 kg (Schneider & Windischbauer, 2008).
According to Blum et al. (1999), who also identified that self-employed farmers are somehow responsible
for money laundering, one of the ten essential rules of money laundering is:
… the more the business structure of production and distribution of non-financial goods and services is
dominated by small and independent firms or self-employed individuals; the more difficult the job of
separating legal from illegal transactions.
Hendriyetty & Grewal (2017) mentioned that Self-employed individuals and small local firms are not
regulated in emerging economies and consequently operate unofficially; thus, they are classified as part
of the shadow economy. Money launderers utilize business enterprises in the shadow economy as routes
to disguise their illicit earnings in the early stages of money laundering. Blum et al. (1999) mentioned that
underground operations are either unlawful or unofficial enterprises that engage on several stages with
legitimate business.
The shadow economy is mostly comprised of tiny, independent businesses or self-employed people. They
typically keep their enterprises small in order to escape official inspection and the need to register in the
official sector. As a result, the number of tiny and independent businesses will grow, which will be utilized
by money launderers to conceal their unlawful operations and to give it a legal outlook. As a result, the
larger the shadow economy, the more challenging it is to discover money laundering since it is impossible
to distinguish between legitimate and criminal activities.
Despite the fact that the shadow economy is typically run by small, self-employed or individual businesses,
small businesses are an easy scapegoat for extortion by huge corporations that are more competent at
skirting the law by abusing small businesses. This informal sector serves as a conduit for money laundering
operations. Because it is challenging to do careful research on operations in an economy with a larger level
of interaction between documented and undocumented, official and unofficial, underground and above
board activities, determining the origins of funds will become increasingly complex Blum et al. (1999).

Furthermore, money laundering promotes the growth of the shadow economy. Because utilizing legitimate
means to shift funds is risky, particularly with the anti-money laundering system in place, money launderers
will shift their money to the informal economy. In the underground economy, unconventional financial
transactions and tangible cash transfers are preferred (Hendriyetty & Grewal, 2017).
4.3 Negative Impact of Money Laundering
On Business
The reputation of the financial services and banking industry is strongly reliant on the notion that it operates
within a system of high legal, professional, and moral codes. A business institution's image for transparency
is one of its most precious assets. If money from illegal activity is easily processed through a specific
institution, either because its professionals or managers have been bribed or because the organization
turns a blind eye to the questionable nature of these monies, the organization may be drawn into active
complicity with criminals and become part of the illicit network itself. Indications of this collusion will have
a negative impact on the views of other financial intermediaries, regulatory bodies, and regular customers
(FATF).
On Economy
Launderers constantly search for new ways to launder their money. As established financial centers or
developed nations build strong anti-money laundering policies, economies with expanding or emerging
financial centers but insufficient regulations are especially vulnerable. Variations of anti-money laundering
policies among countries will be targeted by money launderers by transforming their networks to different
nations with financial systems that are weak or ineffective defenses. Many may claim that emerging
economies cannot expect to be overly choosy about the funding sources they receive. However, deferring
consequences is risky. The longer it is delayed, the more established and organized crime occurs. Foreign
direct investment is depressed whenever a nation's commercial and economic sectors are considered to
be under the influence and dominance of organized crime, just as it is when a personal financial institution's
credibility is harmed (FATF).
Financial market imbalances put the international economy's stability at risk. Economic problems are
hence worsened, if not caused. Furthermore, money laundering involves the penetration of lawful economic
systems as well as crowding cutthroat competition. Additionally, the "dollarization" of the economy limits
the budgetary and financial political reach of national governments and banks, respectively. Aside from
that, financially impoverished nations that primarily provide financial services risk economic (and hence
political) reliance. Measures to fight money laundering boost the cost of legitimate activity and interfere
with them in the capital markets.
4.4 Steps of Money Laundering
Money Laundering basically follows three steps.
Placement
The launderer inserts unlawful funds into the economic system at the first or placement stage of money
laundering. This might be accomplished by dividing large quantities of cash into smaller sums that are
then deposited directly into a bank account, or by obtaining a series of financial instruments (cheques,
money orders, etc.) that are subsequently collected and transferred into banks at a different area. There is
an elevated chance of being revealed at this point. The placement stage is divided into two sub-sections
as follows.

Primary deposit
This refers to the quick transfer of criminal income into a legal economic system without drawing the notice
of governmental authorities. Limited quantities are undercut with "structuring" and "smurfing" to escape
detection, reporting responsibilities, and paperwork requirements. Furthermore, funds are carefully divided
into small quantities in order to allow payment in multiple financial institutions below relevant recognition
and disclosure limits. Savings accounts of up to 15,000 Euro are exempt from these requirements in Austria,
for example, (Schneider & Windischbauer, 2008).
Another technique of placement includes exerting an effect on economic sector institutions in terms of
acquiring existing banks or establishing new banks in offshore nations ("company havens" or "bank
havens"). Furthermore, coworker corruption is a regularly utilized criminal tool to place incriminated funds:
endeavors are made to socialize with bank personnel in order to permit immediate penetration of funds
without drawing the attention of regulatory agencies. Depositing cash into bank accounts located abroad
allows participation in the economic or financial cycle.
Secondary deposit
Secondary deposits, as opposed to primary deposits, are a passive penetration of the liquidity into the
Financial sector and hence a transformation into book money via the interconnectivity of a real or legal
entity. This occurs either by modifying the channel, in which incriminated funds are turned into other
resources, or through frontmen, who act on their own behalf but trade for the account of a third party or
grant the use of their name in order to execute out (realize) an account opening, the formation of a
company, or the conclusion of an insurance scheme.
Forward displacement of the money laundering site onto life insurance companies, financial service
providers, and exchange offices can also result in indirect placement. At the moment, numerous proposals
are received through email or posted on websites to work as a "financial agent," providing banking
accounts that are used to send unlawful gains in order to conceal transfer methods.
Another method of laundering money is the formation of front firms, which, in contrast to frontmen
corporate entities, penetrate black money on the bank deposits and hence into the financial system
through simulated turnovers. Cash-intensive businesses (for example, cuisine, shipping enterprises, vehicle
business, hotel industry, auctioneers, and galleries) are required. Partially, no phantom firm/dummy firm is
created, but simply foundational documentation is falsified. For example, 25,000 life insurance clients are
suspected of laundering illicit money with single payments totaling one billion euros (Schneider &
Windischbauer, 2008).
Layering
Once the money has entered the financial system, the second stage, often known as layering, takes place.
In order to disassociate the funds from their source, the launderer converts or moves them during this
phase. The money may be transferred using the buying and selling of financial products, or the money
launderer could simply transfer the funds using a network of accounts at numerous businesses around the
globe. In countries that are unwilling to help with anti-money laundering efforts, this practice of using widely
dispersed institutions for laundering is very prevalent. In other situations, the money launderer may disguise
the movements as orders for goods or services to give them the impression of legitimacy.

Integration
After successfully processing the illegal gains through the initial two stages of the money laundering
procedure, the launderer advances the money to the third step, integration, when the funds are re-
introduced into the legal financial sector. The launderer may decide to invest the money in the housing
market, luxury goods, or business ventures.
4.5 Electronic Money Laundering and Steps
When funds are laundered electronically, it is defined as electronic (E) money laundering.
E-Placement
In conventional laundering, criminals must give over their money to a bank or convert it into a product or
property, which is then sold and the laundering money is used to finance and production. These procedures
are more difficult to complete since the client identification and verification criteria have been met. Most
nations limit the number of entries in the cash flow, but with electronic money laundering, the criminal can
convert his or her unlawful earnings into digital money and cross borders or acquire expensive products
since verification is tough and it is a low-risk operation. However, it appears that worldwide regulations for
them have not been set.
E-Layering
In conventional money laundering, the launderers must use a comma to separate the occasional source
from the first entry and other potential uses. "Money committed to engaging in a leisure facility or a publicly
approved action," for example. Confidentiality and camouflage of identity are the goals of money
launderers, which have typically been challenging. However, electronic money laundering processes which
can be done immediately, without the need for a border, and through the use of digital transactions would
not be hard, and even in certain nations, opening a bank account with no physical verification can be
done virtually
E-Integrating
In conventional integration, many techniques are followed such as investing, taking loans to form coating
firms, and fabrication of papers, including buy or sale transactions, and it is a high-risk operation.
However, all those processes can be done in a virtual space and with less danger.
4.6 Anti-Money Laundering Initiatives
For more than thirty years, the international community has developed a comprehensive anti-money
laundering legislative framework. The creation of this paradigm was linked to the United Nations Vienna
Convention of 1988, which addressed the problem of narcotics trafficking profits laundering. Following this,
the Palermo Convention of 2000 and the Convention Against Corruption in 2003 combined enlarged
derivative crimes related to the money laundering offense. As a result, all three Conventions formed the
basis for the globalized structure for countering money laundering. However, the actions of the Financial
Action Task Force have been more essential to the expansion of the international anti-money
laundering legal system (Force, 2012).
The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
(Vienna Convention) was the first inter-governmental accord to demonize money laundering, but it is
limited to drug-related crimes such as drug manufacturing, plantation, acquisition, transfer, ownership,
and control. The agreement also compelled governments to implement global anti-money

laundering regulations, including as freezing and relinquishing any unlawful gains. However, the phrase
"Money Laundering" was not formally introduced in the Convention. Nonetheless, this document created a
broad definition of "proceeds" of narcotic crimes and was a comprehensive weapon for combating present
global narcotics trafficking; it required nations to prosecute the laundering of drug-related profits and
designated money laundering as an actual criminal act. Under this agreement, "proceeds" are defined as
any property derived or received, directly or indirectly, from the conduct of drug-related offences (as
defined in paragraph (a) of Article 3 of the Convention). Furthermore, the scope of the offense includes
cooperation in concealing or disguising the illicit activity or origin of the assets (drug revenues). Moreover,
money laundering is committed by aiding any individual in the commission of such an offence or
misdemeanor in order to avoid the legal consequences of his/her actions; assisting means any act of
invisibility or disguises of the true origin, disposition, or mobility of assets, recognizing that such assets is
acquired from an offence or offences founded in in accordance with Article 3 of the UN Vienna Convention.
Nevertheless, while the criminalization efforts under the Vienna Convention acknowledged the revenues of
drug-related offences, there were major gaps in the terminology with regard to money laundering.
Although its range and applicability were limited to drug-associated money laundering. The revenues from
other offences were still allowed to be washed and so fell inside the instrument's blind zone (Korejo et al.,
2012).
The United Nations Convention on Transnational Organized Crime (Palermo Convention) is a global pact
combating global organized crime that was signed in Palermo in 2000. However, it went into effect on
September 29, 2003. The Convention was created to encourage governments to work together more
effectively to detect and fight international organized crime. The Convention was the initial worldwide
legally enforceable treaty addressing cross-border organized crime. The Palermo Convention broadened
the criminality realm of "criminal proceeds" from drug-related offences to proceeds of "severe offences"
when the punishment for the violent act is ultimate liberty forfeiture for four years or more. Besides, under
the same Convention, an essential progression in the crime of money laundering occurred by prosecution
to a wide range of predicate offences, which include all severe crimes, participation in a structured terrorist
cell, inclusion as an association, bribery, limiting justice, and engagement of legal entities in violent felonies.
Even though the Convention is a comprehensive framework that establishes a foundation for handling with
the subject of money laundering and profits of wrongdoing, it has several shortcomings, including
ambiguity in words like as "serious offence" and no definition of the phrase "predicate offence." The treaty
also has various flaws in terms of corruption and malpractices offences.
The Financial Action Task Force (FATF), a 33-member international group combating money laundering
and terrorism funding, aims to guide non-cooperative nations with a "name and shame" approach by
releasing a "black list". Furthermore, it is attempting to prevent money laundering on a global scale using
conceptual frameworks and 40 international standards suggestions. There have been no Non-Cooperative
Nations and Jurisdictions on FATF's list since October 13, 2006.
4.7 Suspicious Transaction Model
Jullum et al. (2020) developed an anti-money laundering model to detect money laundering using
machine learning technology. They displayed the following equation:
L{Yi,f(xi)} = Yi log{f(xi)} + {1-Yi} log{1-f(xi)}

Suppose Yi to accept the value i if transaction i was signaled to the authorities and 0 if it was not. Let xi
indicate vectors comprising the numeric explanatory variables. Jullum et al. (2020) try to predict the
chances of a transaction being detected, given its explanatory variables minimizing the logistic loss.
Several research have revealed that there is no perfect method for categorization. Chen et al. (2018), Rivera
et al. (2015), Savage et al. (2016), and Zhang and Trubey (2018) all recommend running many algorithms
on the same data set before deciding which one to use. Ruiz & Angelis (2021) suggested four algorithms:
these are logistic regression, random forest, support vector machines and decision tree.
4.8 Limitation of the study
This study has some general limitations. First of all, this paper deals with the overall money laundering
systems but it does not discuss this illegal activities from the point of view of any particular country. An over
generalization may be found which, sometimes, may lead the reader to abstract observation. Second, the
data were taken from the randomly chosen previously published research and discussion is based on the
already published literature. Questions may arise about the validity of those studies. Third, this study was
conducted on the theoretical level by screening the established summaries of past research, not on the
on-ground practice of money laundering and it is not an empirical research work. Fourth, a limited number
of research was chosen for data mining, which can narrow down the diversity of this study. To eliminate
this problem, more research papers could be chosen to extract data but most of them were excluded
because of the repetition in topics. Fifth, only meta-data are discussed and analyzed. No interview nor
questionnaire approach to data collection was conducted.
4.9 Recommendations for further research
The current study presents an overall outline of money laundering and its ways to clean dirty money by
following some structural non-complex steps. Though the ways to launder money seem to be to simpler, it
needs to be monitored continuously because launderers always look for new ways and unique systems to
launder their illicit money. So, regular observation and updated technologies, and their implementation
must be on the way to be developed. Researchers, both empirical and non-empirical, can have eyes on
the divers and newly discovered techniques that launderers follow for hiding the sources of money and
making it legal. The continuous research approach can be one of the ways to help governments and anti-
money laundering agencies to reduce it to a minimum level. Additionally, regular updates in the anti-
money laundering software and models should be emphasized. Since AI is approaching rapidly, it can be
taken into action to be used against money laundering activities worldwide. So, research in technology and
in the field of money laundering is necessary to be conducted regularly, particularly, empirical research is
essential because without empirical research it is not possible to know about the actual and on-ground
scenario. Finally, new transaction models with innovative ideas and creative ways to detect money
laundering are also expected. Tech-savvy academicians have the responsibility to develop models which
will adopt and help the authorities to find out the crime of money laundering and cope with the newly
emerging technologies.
5. CONCLUSION

Conjunction with conventional banking and electronic banking, lowering the threat of illegal activities and
the presence of infrastructures and parallel organizations or the non-utilization of activities in technology
make electronic money laundering more readily. Additionally, the use of private enterprise development
and the function of governmental political analysts is diminishing. Consequently, decentralization will make
the money-laundering schemes more creative and complicated, making them very tougher to combat.
The transaction models developed by scientists, researches, and tech savvy people are good alternatives
to work against money laundering. Anti-money laundering activities are initiated and practiced throughout
the world with a great consideration but they are not enough in regarding to the amount of money is
laundered annually world wide. Besides, some nations are yet to take strong position against this and some
are not helping as much as it should be though, in paper, there are no non-cooperative nations since 2006.
Until the documented and theoretical realizations come to the implementation, money laundering can be
unstoppable.
ACKNOWLEDGEMENT
The author would like to thank Umama Rashid Lamiya (MSc student, Department of Soil Water and
Environment, University of Dhaka) for helping screen the materials and find out the best resources for this
paper.
FUNDINGS AND CONFLICT OF INTEREST
No funding was taken for writing this article and the author gives full consent to publish it.
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