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Money Laundering Stages
The Intel Analyst Academy · Lesson Notes
The basics lesson gave you the three-stage sketch: placement, layering, integration. This lesson is what you do when a real file refuses to sit in one box. Criminals do not file a cover sheet announcing which stage they are in. They move value until the story of the money is harder to tell than the story of the crime that produced it.
Your job is not to recite the model. Your job is to say which movement the records support, which label is still a hypothesis, and what would prove you wrong.
The placement-layering-integration sequence is a teaching model. It is useful because it forces a question: where did value enter a channel that looks legitimate, how was the trail confused, and where did it become spendable. It is not a statute, and it is not a promise that every scheme will show you three neat chapters.
A single transaction can do two jobs. A cash purchase of property can be placement and integration in the same afternoon. An invoice that never matched a shipment can layer funds and, once the payment lands in a trading company, look like ordinary revenue. If you force every hop into exactly one stage, you will write a tidy paragraph and a wrong one.
The predicate offense is the crime that produced the value: fraud, trafficking, corruption, extortion, or something else you can name. Laundering is what was done to the proceeds so they could be held or spent with less friction. You can often see the financial movement before anyone has proved the predicate. Say that plainly. "The flow is consistent with layering" is an analytic judgment. "This person committed fraud" is a different claim, and it needs its own evidence.
Many schemes are a service. The person who committed the predicate offense may never touch the accounts that do the layering. A consultant, a trading company, or a money-service business may be the part you can see. Map the service. Do not assume the name on the account is the name on the crime.
Placement is the moment illicit value enters a channel that has a legitimate excuse to exist: a bank, a money transmitter, a casino, a cash business, a courier who will carry it across a border. It is often the noisiest stage, because cash and first deposits still have to meet a human, a form, or a threshold.
You already know that reporting thresholds exist and that people try to sit under them. Here is the analytic rule: one deposit below a threshold is ordinary life. A repeated pattern of amounts, locations, and timing, with no business reason, is the lead. Describe the pattern: who, where, how often, how close to the line, and what the account did next. A list of near-threshold deposits with no comparison to the customer's normal behavior is a spreadsheet, not an assessment.
If the only interesting fact is "the amount was under the reporting line," you do not have a case. You have a number that also describes most of the country buying a used car.
Layering is the attempt to break the audit trail. The money is already in a channel. Now it moves through hops, labels, and jurisdictions until a reader gets tired. Profit is not the point of this stage. Distance is.
Round-tripping is value that leaves and comes home wearing a new story. A person sends funds to a company they control, and the company sends the funds back as a loan, a dividend, or an invoice payment. On paper there is a counterparty. In substance there is a mirror. You are looking for common control, not for a famous island.
A twelve-hop path is a reason to keep reading. It is not, by itself, a finding of laundering. Legitimate treasury operations are also ugly: netting, cash pooling, tax withholding, and escrow all produce hops that look theatrical if you have never seen a real finance department. The question is whether each hop has a commercial reason you can check. If the reason is "consulting" and nobody can name the advice, the label is the weakness. Write that.
Integration is the stage where the value can be spent, invested, or shown in public without an obvious link to the predicate offense. It often looks dull. Dull is the product the launderer paid for.
Integration is where analysts get bored and criminals get comfortable. Boredom is not a finding either. If the assets match a documented sale of a prior business, say so and stop performing suspicion.
When you brief, separate the movement from the label.
Do not decorate one wire transfer with all three stage names because the model has three names. Pick the judgment the records will carry. Park the rest as hypotheses with a collection need.
A useful sentence sounds like this: "The cash deposits are consistent with placement into a commingled business account. The same-week wires to two newly formed companies, both invoiced as consulting, are a layering hypothesis. Integration is not shown. We do not have the asset purchases or the ownership of the recipients."
That paragraph can survive a question. "They are laundering" cannot.
Some schemes barely use the textbook sequence.
The model fails in one other way: it tempts you to tell a story with a beginning, a middle, and an end. Intelligence files are often a middle. Brief the middle.
Scenario. A logistics clerk's personal account receives twelve incoming transfers in five weeks from four companies that share a formation agent and a virtual office. Each transfer is described as "reimbursement." The next day, in every case, ninety percent leaves to a property solicitor for a deposit on a flat the clerk is buying. The clerk's salary has not changed. Two of the sending companies have no website, no staff listed in the registry, and invoices on file for "market research" with no description of the research.
Write four short paragraphs:
If your answer uses the phrase "classic integration" for the incoming wire and never mentions the flat, read the dates again. The flat is doing something. The wire is doing something else.
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