Churning

Churning is the process of making multiple transfers of funds in order to make the analysis of bank accounts by an investigator more difficult. When a person is engaged in money laundering, dirty money is initially recorded in a bank account. Once a sufficient amount of cash has been accumulated, it is broken up and wired to multiple other accounts, typically in foreign locations, where the amounts are again split up and wired to other bank accounts. This constant reshuffling process obscures the origin of the cash.

The churning concept can also apply to the excessive buying and selling of client-owned securities by a broker in order to earn commissions. This situation can only arise when a broker has discretionary authority over a client’s account.

Related Courses

Money Laundering