Certified Fraud Examiner Practice Exam 2025 – All-in-One Guide to Master Your Certification!

The correct sequence of the three stages of money laundering is placement, layering, and integration.

During the placement stage, illicitly obtained money is introduced into the financial system. This could involve depositing cash into a bank account, purchasing assets, or engaging in transactions that disguise the origin of the funds. This step is critical because it separates the money from its illegal source and begins the process of making it appear legitimate.

Following placement is the layering stage, where the goal is to obscure the illicit origins of the money through a series of complex financial transactions. This can include transferring funds between different accounts, engaging in foreign exchange transactions, or converting cash into other forms of assets. Layering aims to cloud the paper trail and make it difficult for authorities to trace the money back to its illegal source.

The final stage, integration, involves reintroducing the now-cleaned money into the legitimate economy. The funds appear to be from legal sources after being laundered through the previous stages, thus allowing the individual to use the money freely without arousing suspicion.

This correct sequence highlights how money laundering operates systematically to convert illicit funds into legitimate assets, making the understanding of these stages essential for recognizing and combating money laundering activities.