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5 things to know about money laundering

Manafort foreign agent

Money laundering may be an age-old crime, but it's not at all behind the times. 

Reports that President Donald Trump's former campaign manager, Paul Manafort, is under investigation for possible money laundering are putting a fresh spotlight on the crime, which is thought to touch trillions of dollars in assets each year.

As a term, money laundering covers a broad range of techniques to hide ill-gotten gains from criminal activities. While governments and banks have developed new technology for tracking dirty money, money-launderers are also taking advantage of tech, relying on strategies such as online gaming and digital currency to "clean" their assets. 

As much as $2 trillion in assets are estimated to be money-laundered annually, according to the United Nations Office on Drugs and Crime, although the inter-governmental Financial Action Task Force (FATF) says it's difficult to accurately assess the scope of the problem given its illicit nature.

Money laundering doesn't just affect criminals. The FATF notes that it can allow organized crime to take control of portions of a country's economy or, through bribery, gain influence over public officials. 

Following are five things to know about money laundering:

How is technology changing money laundering? The anonymity of the internet and digital currencies are creating new outlets for money launderers. "Dirty" money can be put into online marketplaces, such as gaming platforms, and cashed out as "clean" money, according to a paper from cybersecurity expert Jean-Loup Richet. Some of those methods are simply updated versions of older techniques, such as a "mule" scam, where unwitting consumers are asked to do a favor for a stranger who sometimes claims to be a high-ranking official. Those favors can include transferring assets, which allows the criminal to clean their profits through their victim's accounts. Others are newer, such as relying on digital currencies and online games such as World of Warcraft, where scammers can open accounts, send digital money to associates in other countries who then cash it out.

How do criminals launder money through real estate? Illicit funds can be made to seem legitimate through real estate by by being funneled through limited liability companies that then purchase real estate, according to the U.S. Treasury's Financial Crimes Enforcement Network, or FinCEN. Criminals also rely on shell companies to buy real estate in all-cash transactions, often for luxury real estate in New York City and Miami, according to the agency.  

Aren't only shady organizations involved in money laundering? Actually, no. Some large banks and corporations have been charged with the crime, such as in the case of Wachovia Bank, which settled allegations of money laundering for $150 million in 2010. The bank admitted a "failure to identify, detect and report suspicious transactions." Other well-known banks that have been accused of money laundering include HSBC, Bank of China and Credit Suisse, among others. 

What type of money laundering is tied to Russia? One of the biggest scams was the so-called "Russian Laundromat," a scheme uncovered by the Organized Crime and Corruption Reporting Project, an investigative reporting group. The Russian Laundromat funneled at least $20 billion out of Russia and into dozens of other countries through shell companies, with the group noting the money may have been diverted from the Russian treasury using methods ranging from fraud to tax evasion, the group found.

In a more recent case, the Department of Justice settled a $230 million money-laundering case earlier this year just days before the trial. The case involved Russian executive Denis Katsyv, the owner of Prevezon Holdings, with U.S. officials seeking to seize Manhattan real estate and other assets they alleged were used to launder money through a fraudulent tax refund scheme. 

What are the major money-laundering countries? According to the U.S. State Department's assessment of countries of "primary concern," there are dozens of nations whose financial firms are said to launder money for drug traffickers, including the United Kingdom, Russia and China. Another study of developing countries found that China and Russia are the No. 1 and No. 2 countries involved in illicit money outflows. 

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