What is the term for money that has been gained illegally and is reintegrated into the economy?

Laundered money refers to funds obtained through illegal activities that have been processed to appear legitimate and can thus be reintegrated into the economy. The process of money laundering typically involves three stages: placement, layering, and integration. During placement, the illicit funds are introduced into the financial system; layering then obscures the original source of the money through complex transactions; and finally, integration makes the money seem legitimate, allowing it to re-enter the economy without raising suspicion.

Understanding the concept of money laundering is crucial in the context of ethics and professional practice, especially for financial professionals, as they are often responsible for identifying and reporting suspicious transactions. Knowledge of this term helps to promote compliance with laws and regulations aimed at preventing financial crimes.