Which of the following is an example of proceeds of crime?

Which of the following is an example of proceeds of crime?

• A. Money earned from a legal business transaction
• B. Investment portfolios from legal activities
• C. Funds acquired through drug trafficking
• D. Profits from an authorized bank loan

Answer: (C)

The example of proceeds of crime refers to money or assets generated from illegal activities. In this case, funds acquired through drug trafficking clearly fit this definition, as drug trafficking is an illegal act that generates revenue from unlawful conduct. Such revenue is considered "proceeds of crime" because it originates from actions that violate laws and pose risks to public health and safety. In contrast, the other options involve legitimate financial activities. Money earned from a legal business transaction and investment portfolios from legal activities are both derived from lawful practices and therefore do not qualify as proceeds of crime. Similarly, profits from an authorized bank loan arise from legal financial agreements, further reinforcing that not all forms of income are associated with criminal activity. Understanding this distinction is crucial in identifying and mitigating risks related to money laundering.

The example of proceeds of crime refers to money or assets generated from illegal activities. In this case, funds acquired through drug trafficking clearly fit this definition, as drug trafficking is an illegal act that generates revenue from unlawful conduct. Such revenue is considered "proceeds of crime" because it originates from actions that violate laws and pose risks to public health and safety.

In contrast, the other options involve legitimate financial activities. Money earned from a legal business transaction and investment portfolios from legal activities are both derived from lawful practices and therefore do not qualify as proceeds of crime. Similarly, profits from an authorized bank loan arise from legal financial agreements, further reinforcing that not all forms of income are associated with criminal activity. Understanding this distinction is crucial in identifying and mitigating risks related to money laundering.