Money fraud is an act to generate funds to disguise illegal origins. Smuggling, illegal arms sales and organized crime activities that include drug trafficking and   prostitution could be considered as money fraud and could generate large amounts of money. Bribery, computer fraud schemes and embezzlement could also create big profits.

In money fraud, criminals do this by disguising the sources, moving the funds to a place where they are not likely to draw attention. In response to the increasingly alarming money fraud schemes these days, the Financial Action Task Force on Money Laundering was created by the G-7 summit in Paris in the year 1989.

By its nature, money fraud or money laundering is an illegal act done by criminals which happens outside the normal range of financial and economic statistics. In the activity, the scammer or launderer introduces his illegal profits to the financial system. This could be done by breaking up large amounts of cash to less conspicuous smaller amounts that are deposited directly to a bank account or by buying a series of monetary instruments such as money orders or checks that are collected and deposited to accounts at different locations. The launderer could invest the funds into luxury assets, real estate or business ventures.