Money laundering is the practice of engaging in financial transactions to conceal the identity, source, and/or destination of illegally gained money. In a non-definitory meaning, money laundering is the gain of money through an illegal act. Unfortunately, this occurs fairly regularly in the business world, quite often without the company themselves knowing that it’s occuring.

An example of this was a case in Germany where three Hewlett-Packard employees were charged guilty with money laundering. The group of individuals involved were illegally delivering millions of dollars worth of computing equipment. Although the men were ex-Hewlett-Packard employees, the company itself was not investigated as after research, it was proposed that the men were even stealing from their own employer. This is a prime example of a company not knowing that millions of dollars are being stolen from them. HP has since been working with the German Government to try and identify where and how these illegal acts were being made as well as where the 9 million dollars in kick back are located.  To read more bout the case follow this link.

It is important as a business student to understand the cause and effects of money laundering as the reality is, it could happen in any of our businesses. Even when security is at its most prestigious state, corruption is possible and it is therefore important to identify the warning signs before millions of dollars are lost.

Kick Back : A kickback is an official’s share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding.