Which laundering method involves a criminal incorporating a new company to disguise illicit funds?

• A. Offsetting real estate transactions.
• B. Loan back.
• C. Cuckoo smurfing.
• D. Loan manipulation.

Answer: (B)

The method involving a criminal incorporating a new company to disguise illicit funds is known as "loan back." This technique typically involves the creation of a legitimate-seeming business, through which illegal proceeds can be funneled. By establishing a company, the criminal can route the illicit funds as business profits, making it appear as if they are legitimate earnings. The loan back process involves the criminal then taking a loan from this newly created company, providing a façade of legitimacy for the funds used in the business operations.

In contrast, offsetting real estate transactions primarily deals with the manipulation of real estate markets rather than incorporating new entities. Cuckoo smurfing, while it involves discreetly moving money through various small transactions, does not specifically focus on incorporating new companies to disguise funds. Loan manipulation refers to practices surrounding the distortion of information or terms related to loan agreements, rather than setting up new businesses for the purpose of laundering. Thus, loan back is the most fitting method relating to the incorporation of new companies to disguise illicit funds effectively.