What Is The Difference Between Fraud And Money Laundering ?  

Many people believe that fraud and money laundering is one and the same thing as both are labeled as crimes. However, there is a difference. What is the difference between fraud and money laundering? If you read on, you will discover this yourself.

Fraud is deception and misrepresentation to make money. If you make false claims to get insurance, it will be classified as a fraud. If you manufacture and produce counterfeit credit cards, it would be a fraud. If you burn your home to get the insurance on it, it will be labeled as fraud. If you run a phony investment company and get people to invest their hard earned money in the company, it is a fraud.

Most frauds are conducted by so-called white collar criminals as they are professionals with specialized knowledge to conduct financial transactions. And fraud causes hundreds of millions worth of damage each year and ruins lives of equal number of people.

Unfortunately fraud cannot be proven easily in a court and the laws in the US differ from one state to the next. However, most states have one thing is common that it is important for the prosecuting attorney to prove that deliberate misrepresentation of facts occurred.

On the other hand, money laundering is done by criminals, who are involved in illegal activities like drug trafficking, illegal arms deals, smuggling, etc. Money laundering also involves a series of complicated financial transactions that help to disguise the true ownership of the funds. Then using financial institutions in the country, this unaccounted for money is reinjected into the financial system as legitimately obtained funds.

This is the difference between fraud and money laundering. Both are crimes perpetuated by criminally inclined people.

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Why-Is-The-Internet-Important-To-Money-Laundering      Today many countries have aggressive anti money laundering policies which are making it more and more difficult for criminals to use the traditional methods of laundering money. That is why new methods are being found to launder money and one of them is the Internet. More..

 


 

 

 
   
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