In the past, the term 'money laundering' was applied only to financial transactions related to organized crime. The act is defined as 'taking any action with property of any form which is either wholly or in part the proceeds of a crime that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial ownership of said property'. In United Kingdom law, the common law definition is wider.

In United States law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. It is usually a key operation of organized crime. It is a crime in many jurisdictions with varying definitions.

Money laundering is the process of illegally concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source.

Placing 'dirty' money in a service company, where it is layered with legitimate income and then integrated into the flow of money, is a common form of money laundering. For other uses, see Dirty Money (disambiguation).