The goal of many criminal acts is to generate profit for the individual or group committing the crime. Money laundering involves processing these criminal proceeds to conceal their illegal origin. This process is essential because it enables criminals to enjoy their profits without exposing the source of the funds.

Illegal activities such as arms trafficking, smuggling, and organized crime—such as drug trafficking and prostitution rings—can generate substantial proceeds. Additionally, crimes like embezzlement, insider trading, bribery, and computer fraud schemes can yield significant profits, creating an incentive to "legitimize" these ill-gotten gains through money laundering.

When criminal activities generate substantial profits, those involved must find ways to control the funds without drawing attention to the underlying crimes or the individuals involved. Criminals accomplish this by disguising the sources, altering the form, or moving the funds to locations where they are less likely to be scrutinized.