Which of the following crimes will not give rise to funds that may be the subject of money laundering?

• A. Drug trafficking
• B. Fraud
• C. Embezzlement
• D. Loan to a child

Answer: (D)

Money laundering involves disguising the origin of funds that come from criminal activity, turning dirty money into seemingly legitimate money. The sources that commonly produce such proceeds are activities like drug trafficking, fraud, and embezzlement, because they generate cash or assets from illegal acts that criminals want to legitimize. A family loan to a child, however, is a legitimate financial transaction and not money produced by crime. It does not create illicit proceeds to be laundered, unless the funds used for the loan themselves originated from crime, which is a separate issue. So this option describes a non-criminal source of funds, which is why it’s the best answer.