EXAMPLE OF MONEY LAUNDERING.

An example of money laundering - taken from the movie, "Shivaji- the boss"-

This is a well known and highly appreciated movie of Rajnikanth that attracted the worldwide recognition due to the outstanding concept of the director and the script writer. The protagonist of the movie comes to know about the vast amount of the black money hidden by the leaders and the ministers in various forms. After getting hold of that money through physical infliction on the guilty, he starts dissipating them to the foreign banks in the tax-haven countries. From those banks, he distributes the money to various people residing in various countries in small packets. After all the money has been distributed to the relatives and others in small packets, he asks all of them to send the money back through internet transfer in the name of "Shivaji foundation and trusts". In this way, he has all the required documents and the smallest details of the transactions that occurred thorough the bank account of his trust. He utilizes the same money for building schools, hospitals, colleges, roads and other developmental activities. But do you really think that this could be possible in the real world. When you shall hear about the uses of the money generated through money laundering, you shall be intensely terrified.

Another example can be seen in the case of trading business. In order to avoid tax such as sales tax and VAT, the firms are able to get false invoices for their purchase from another firm. The other firm is only a firm-on-paper without any real transaction. After the invoice has been made, the owner of the false firm pays the amount of the invoice to the owner of the former firm as hard cash. He charges some commission on it. The owner of the real firm deposits the same into his bank and get the invoice cleared as there is enough money in his bank account to be transferred to the owner of the paper firm. Thus, the owner of the paper firm gets his money back and also, the owner of the real firm is able to get the cheque honored. In this way, the banks do not get any clue as to the illegal acts of these people.