Which scenario illustrates money laundering?

• A. A drug dealer deposits cash from drug sales into a bank account
• B. A person saves money in a savings account from legal earnings
• C. A company pays taxes on income
• D. A customer withdraws cash to buy groceries

Answer: (A)

Money laundering is about making illegally obtained funds look legitimate by moving them through the financial system. Depositing cash from drug sales into a bank account is a classic example of the initial step, often called placement, where illegal proceeds enter the banking system with the aim of concealing their true origin and later being disguised as legitimate income.

The other scenarios involve legitimate funds or ordinary transactions: saving money from legal earnings, paying taxes on income, and withdrawing cash to buy groceries. None of these demonstrate the concealment or legitimization of illicit proceeds, so they don’t illustrate money laundering.