Which stage is specifically associated with creating complex layers to disguise the audit trail?

• A. Placement
• B. Layering
• C. Integration
• D. Detection

Answer: (B)

Layering is the stage where money launderers create complex layers to disguise the audit trail. After funds enter the financial system (placement), the next goal is to confuse and obscure where the money came from by moving it through a web of transactions. This can involve multiple accounts, banks in different countries, varying currencies, and shell entities, all designed to break the link between the illicit source and the eventual owner.

The other stages are different in purpose: placement is about getting illicit proceeds into the financial system, and integration is about the funds re-entering the legitimate economy as seemingly legitimate money. Detection relates to recognizing and uncovering such activity, not the process of masking it.