Placement: getting cash into the system
What is placement in money laundering?
Placement is the first stage of money laundering: physically getting crime proceeds (usually cash) into the financial system, by depositing it, converting it, or mixing it with legitimate revenue. It is the riskiest stage for the launderer, because it is the moment the money first meets a record.
The problem placement solves
A drug organization’s revenue arrives as thousands of small cash sales. Before that money can buy anything that matters (property, businesses, investments), it has to become a number in an account somewhere. But every legitimate entry point is wired with alarms: cash reports above fixed thresholds, teller suspicion, profiles of what a customer’s deposits should look like. Placement techniques exist to get past that front door.
How placement works
Every placement technique is a variation on three moves: split it into amounts too small to report, disguise it as legitimate revenue, or move it somewhere with weaker controls before it enters at all.
Placement techniques
- Cash-intensive front businesses: A real-looking business that handles lots of cash books criminal money as sales, banks it, and pays tax on it, buying the money a legitimate history.
- Casinos and gambling: Dirty cash buys chips; minimal play and a cash-out turn it into documented gambling proceeds, a source of funds banks rarely question.
- Money mules and funnel accounts: Recruited or deceived account holders receive and forward criminal money, so the bank's customer checks land on a real person who isn't the criminal.
- Stablecoins and OTC brokers: Moving illicit value through dollar-pegged stablecoins (above all USDT on Tron) and converting it to cash through over-the-counter brokers and guarantee marketplaces with little or no KYC.
- Structuring (smurfing): Splitting cash into deposits just below the reporting threshold so no single transaction triggers a currency report.
How placement gets caught
Placement is where most detection effort concentrates, because it is where the launderer has the least control. Currency transaction reports create an automatic record above the threshold; aggregation rules connect same-day deposits across branches; monitoring systems compare deposit patterns to the customer’s stated business; and tellers file suspicious activity reports on behaviour as much as amounts: nervous customers, round-number habits, questions about reporting rules. The techniques that follow are each an attempt to beat one of those controls, and each has a signature that investigators know.
Next stage: layering, burying the trail.
Frequently asked questions
Why is placement the riskiest stage?
Because cash entering the system is where controls are concentrated: tellers are trained to ask questions, cash reports are automatic above fixed thresholds, and unusual deposits stand out against a customer’s profile. Once money is inside and moving account-to-account, each additional hop draws less attention.
What if the proceeds were never cash?
Then there is no placement stage at all. Online fraud, ransomware, and crypto thefts produce money that is already digital; those schemes start at layering. This is the main limit of the three-stage model.
What does a bank do when it suspects placement?
It files a suspicious activity report with the national financial intelligence unit and usually says nothing to the customer; tipping off is itself an offence in most jurisdictions. See how reporting works.
Sources
- Currency Transaction Reporting: 31 CFR 1010.311 (eCFR / FinCEN, accessed August 2026).
- Large Cash Transaction Report guidance (FINTRAC, accessed August 2026).
- Advisory FIN-2014-A005: Funnel Accounts and TBML (FinCEN, May 2014).
- Commission of Inquiry into Money Laundering in British Columbia: Final Report (Cullen Commission, June 2022).