Laundering money typically involves three steps. Placement involves putting illicit funds into the stream of commerce. Layering involves a transaction that conceals the true source of the funds. Integration involves repatriating the money into the economy in its disguised form. The three basic ways in which money is laundered are: (1) trade between countries, starting when couriers who collect money from street sales of drugs deliver cash to a safe house; (2) parallel transactions, in which money launderers try to convert dirty dollars into foreign currency and sometimes back into dollars; and (3) phony business deals using inflated prices. Money launderers routinely use offshore banks, because they are easy and inexpensive to use. Law enforcement and regulatory officials rely on the intermediation of financial institutions as choke points to collect data about fund movements. However, some new electronic payment options create private wire transfer systems that never involve a financial institution. Many legal and regulatory issues regarding such transactions have not been resolved. Security managers should be aware of the elements of an effective money laundering compliance program and should help the company establish procedures that make a reasonable attempt to reduce criminal conduct. Know-your-customer policies are the most important element of a company's security program related to money laundering.