Tony, a broker-dealer, redeposits funds in a money management account across the country using fake identities. Of which type of money laundering might he be guilty?

• A. Placement
• B. Layering
• C. Integration
• D. Financial transaction money laundering

Answer: (D)

Introducing illicit funds into the financial system is the first step of money laundering, known as placement. Tony’s act of redepositing funds into a money management account across the country using fake identities is exactly how a launderer gets the proceeds into legitimate channels, aiming to evade detection at the entry point.

Layering, by contrast, would involve moving the money through numerous accounts and transactions to obscure its origins, which happens after funds have already entered the system. Integration would be reintroducing the funds into the economy as apparently legitimate assets or profits, after the money has been layered. The term financial transaction money laundering is less precise for this specific stage; the scenario best fits placement because it centers on the initial entry of illicit funds.