In which stage of money laundering would you classify depositing small amounts of cash into related accounts?

• A. Integration
• B. Structuring
• C. Placement
• D. Layering

Answer: (C)

Depositing small amounts of cash into related accounts is classified as the placement stage of money laundering. The placement stage involves introducing illicit funds into the financial system, which is often done through various methods, one of which is depositing smaller amounts of cash. This methodology reduces the risk of detection by financial institutions and authorities, as large cash deposits can raise red flags.

During placement, the goal is to distance the money from its criminal origin. By breaking down large sums of cash into smaller transactions, the launderer attempts to evade scrutiny and integrate the money into the legitimate economy. This strategy is often referred to as "smurfing," where multiple small transactions are made to obscure the trail of the funds.

In contrast, the other stages of money laundering—layering and integration—serve different purposes. Layering involves concealing the source of the funds through a series of complex transactions, while integration refers to bringing the laundered money back into the economy in a way that appears legitimate. Structuring specifically refers to the tactic of breaking down deposits to avoid detection, but it is the initial act of placing those funds that defines the placement stage.