Using several methods for estimating losses from money laundering, the total estimate for 2004 was $4.5 billion. The findings confirm that fraud was the major source of laundered funds, followed by the illegal drug trade. The sectors identified by survey respondents as most likely to be used for money laundering were banking, casinos, real estate, and accounting. Respondents identified cash and wire transfers, credit cards, and "payable through" accounts as the principal mechanisms for laundering money. The most likely investments for laundered money were identified as real estate, further criminal activities, gambling, luxury goods, and legitimate business. Although Australia's well-developed controls over national and international financial transactions place it in the lower range of money-laundering costs among nations, the changing international financial environment and increasing sophistication of offenders bring opportunities for new ways of laundering money from illegal enterprises. Its potential for funding terrorist activities makes its identification and control even more important. The research built on the methodology of the first 1995 report on money laundering in Australia. The 2004 survey again involved law enforcement officials and expanded to include a survey of overseas financial intelligence units, as well as relevant researchers in Australia and overseas. The questionnaire encompassed the main crime types and their significance, the amount of proceeds/profit generated from these crimes, how the proceeds were laundered, where the funds were laundered, the impact of laundering on society, and terrorism financing. In addition to the survey, the research reviewed relevant annual reports and an Australian database on financial transactions, as well as a review of relevant literature published after 1995. 2 figures and 14 references