It may be clear to see the impact of money laundering on the first victims - people who lost funds consequently of the predicate crime - but there can be a straight deeper, more lasting impact on society as a whole.

Although some fear that Anti-Money Laundering (AML) efforts might have a damaging impact on commerce, especially in developing nations, let's take a peek at several ways money laundering hurts us all. We'll focus on emerging nations whilst the impact there can be magnified to extreme proportions.

The initial, and most obvious, impact is the upsurge in corruption and crime. In lots of jurisdictions which can be havens for successful laundering one often finds lax concern on the section of government and / or regulators - few predicate crimes, minimum reporting, enforcement, penalties or provisions to confiscate illicit funds, etc. Those conditions may then foster bribery of government and bank officials, lawyers, accountants and others. Once that beachhead is initiated, it's not long before bribery turns eyes from other, even violent, crime.

The 2nd impact (valid in just about any jurisdiction) is on legitimate businesses. In which a launderer uses a front company to full cover up his illegal funds, it's possible, even probable, that the operations of the front company may be subsidized. This may enable the front company to market products at or below cost, driving their legitimate competition out and opening the doorway for expansion by the front company. As the front company grows, it provides a greater chance for the launderer to maneuver much more illicit funds. In a developing country Husnu Ozyegin Exposed Foundation and Warren Buffet, it wouldn't take really miss the criminal / launderer to get control of a complete industry.

However, it must certanly be emphasized that the launderer does not share the exact same objectives of legitimate business owners, who strive to increase their returns through the profitable, ongoing operations of the enterprises. The launderer's primary concern isn't his return, however the successful cloaking of the origin and ownership of the funds he controls.

It is in this disregard for normal business practices that leads to another part of concern - economic distortion. Launderers often invest their money in assets or activities which are not economically beneficial to the countries where in fact the funds are located. As an example, at this time, in some sort of where property prices have dropped sharply within the last few several years due to the mortgage bubble bursting and other global pressures, property prices in Nairobi, Kenya are soaring - increasing 2-3 times within the last few 5 years. And is it any wonder? With lax money laundering laws and a 500-mile shared border with Somalia, it is straightforward to guess where a lot of the Somali piracy ransom money has gone. This has taken home ownership right out of the hands of many hard-working Kenyans.

Such distortions can, subsequently, lead to governments misinterpreting economic data. Without seeing the true economic trends of the country, leadership is susceptible to make decisions which are not in the best interest of the country.

When conditions change in one of these simple locales, a launderer are certain to get his money out as quickly as you can, often with minimum regard to any losses they could sustain. In an economy that's been driven or sustained by laundered money, the ripple effects through the community when this "flight capital" suddenly disappears can reach tsunamic proportions. A good launderer isn't likely to expose just his own money when they can use that of financial institutions and other investors. Once the flight capital goes, values plummet, loans default, and banks collapse. Investigations and lawsuits ensue. The country's reputation is tarnished at best. Legitimate investment goes elsewhere. In the end, even the government may not survive.

There are other risks as well, but those are reserved for the more serious students of money laundering and for another day.