Money laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity

or other serious crimes) is given the appearance of having originated from a legitimate source.

But in simple terms it is the Conversion of Black money into white money. This takes you back to cleaning the huge piles of cash. Indian newspapers frequently report the money laundering scams perpetrated by the Political leaders and some of the prominent stars are the chief ministers of UP, Punjab and Kerala. UP chief minister ms. Mayawati as per the Indian Express reports used some innovative techniques to launder the money by avoiding the tax in legitimate manner. She accepted the donations from persons who were road side heroes. When CBI raided these guys were found in no position to donate huge sums for political motives.

Other Indian star in the laundering Business is Ketan Parekh.It is believed that he shifted the proceeds of money received from the BoI pay order scam to various tax heavens and ultimately in the Swiss Banks.These transactions are believd to be just the tip of the iceberg

Money laundering often occurs in three steps: first, cash is introduced into the financial system by some means (placement), the second involves carrying out complex financial transactions in order to camouflage the illegal source (layering), and the final step entails acquiring wealth generated from the transactions of the illicit funds (integration). Some of these steps may be omitted, depending on the circumstances; for example, non-cash proceeds that are already in the financial system would have no need for placement.[2]

India
The Prevention of Money-Laundering Act, 2002 came into effect on 1 July 2005. Section 3 of the Act makes the offense of money-laundering cover those persons or entities who directly or indirectly attempt to indulge or knowingly assist or knowingly are party or are actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, such person or entity shall be guilty of offense of money-laundering.[citation needed] Section 4 of the Act prescribes punishment for money-laundering with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees and for the offences mentioned [elsewhere] the punishment shall be up to ten years.[citation needed] Section 12 (1) prescribes the obligations on banks, financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month; (b) to furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed and t records of the identity of all its clients. Section 12 (2) prescribes that the records

referred to in sub-section (1) as mentioned above, must be maintained for ten years after the transactions finished. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. The recent activity in money laundering in India is through political parties corporate companies and share market.
Mumbai, March 12 (ANI): The Enforcement Directorate, interrogated Hasan Ali Khan, accused of massive money laundering and tax evasion in their office in Mumbai on Saturday. Khan, India's top tax evader, walked free after a Mumbai court granted him conditional bail on Friday. The bail was a major embarrassment to the Enforcement Directorate that has been probing the manner in which the accused amassed billions, as well as indulged in massive money laundering and tax evasion

MUMBAI: Slamming the Enforcement Directorate over its handling of the Hasan Ali Khan money laundering case, a local court today observed it was not able to make out even a single case against the businessman to seek his custody and asked the agency to do its "homework". "You people are not able to make out even a single case against him (Khan), so what do you want his custody for? What do you want to investigate him for? You people show one offence against him and then we can talk of custody," Principal Sessions Court Judge M L Tahaliyani said pulling up the ED, which is already facing heat from Supreme Court