In money laundering, what stage is described by depositing dirty money into a legitimate financial institution to start the process?

• A. Placement
• B. Layering
• C. Integration
• D. Conversion

Answer: (B)

The main idea being tested is the initial step of money laundering: getting illicit funds into the legitimate financial system. Depositing dirty money into a bank or other financial institution is the placement stage, where the funds are first introduced into the financial system so they can be moved and used without immediate suspicion. Layering, the next phase, involves a series of complex transactions to obscure where the money came from. Conversion deals with changing funds into different forms or currencies to further complicate traces, and integration is when those funds reappear in the economy as seemingly legitimate earnings after they’ve been laundered. So, putting the money into a financial institution at the outset aligns with placement, not layering or the later stages.