International Narcotics Control Strategy Report, 1997. What Is Money Laundering? People who commit crimes need to disguise their money so that they can then use it. This truism is the basis for all money laundering and tax fraud, whether that of the drug trafficker, organized criminal, terrorist, arms trafficker, blackmailer, or credit card swindler. Money laundering generally involves a series of multiple transactions used to disguise the source of financial assets so that those assets may be used without compromising the criminals who are seeking to use the funds. Through money laundering, the criminal tries to transform the monetary proceeds derived from illicit activities into funds with an apparently legal source..."