What Is Money Laundering in Simple Terms?
Money laundering refers to the process of making large amounts of money that were generated from criminal activity appear as if they were acquired via a legitimate stream of income. If the location, source, control, or ownership of funds are falsified, that is considered money laundering.
Money laundering typically involves three stages, which are:
- The placement stage, which refers to the initial move of the funds within the financial system.
- The layering stage, which refers to the time when the supposed criminals sever the ties that can link their funds to criminal activity and obscure the origin of the money from authorities.
- The integration stage, which refers to the transfer of the illegally obtained money back to the person who obtained the money.
Money laundering is illegal because it involves criminal activity and aims to allow criminals to profit from their crimes. Violations of the statutes included in the Money Laundering Control Act can have serious consequences.
Penalties for Money Laundering Offenses
Money laundering is a federal offense. Domestic money laundering as defined by 18 U.S.C. §1956(a) and international money laundering as defined by 18 U.S.C. §1956(a)(2) are punishable by up to 20 years of imprisonment and a fine of up to $500,000 or twice the value of the proceeds involved in the money laundering scheme.
Under Section 1956(a)(3) of the Money Laundering Control Act of 1986, law enforcement officers are permitted to conduct undercover sting operations that invite a suspect to transport money or participate in a money laundering scheme. If it can be proven that the defendant conducted or attempted to or conspired to conduct a transaction concerning money laundering, they can also face criminal penalties, including up to 20 years in prison and a fine of up to $250,000.
What Is an Example of Money Laundering?
Common types of money laundering schemes are:
- Structuring (or smurfing), which involves dividing the dirty money into smaller totals to purchase inconspicuous money orders or cashier’s checks.
- Trade-based laundering, which involves altering or falsifying financial documents (like invoices) to claim dirty money as business profits.
- Cash-business laundering, which involves laundering dirty money through a cash business, such as a laundromat, strip club, or car wash.
- Bank capture, which involves laundering money through a bank or financial institution that you own or run by hiding/exchanging illegal funds with bank transfers.
- Casino laundering, which involves buying casino chips with “dirty money,” and gambling in small amounts. The chips can then be turned back in for cash and claimed entirely as cash winnings.
- Real estate laundering, which involves using real estate to launder money. Specifically, someone could buy and sell real estate property with the case, which is a legal act. However, the money used could have been funded by illegal activities.
Consult with Our Skilled White-Collar Crime Attorneys
At Hubbs Law Firm, our attorneys are committed to helping our clients navigate the criminal defense system and develop a personalized case strategy. If you or a loved one are under investigation for or have been charged with a money laundering offense, we are here and equipped to help you. Because of our understanding of the federal court system and laws governing your case as well as our trial experience, you can trust our team with your case.
To schedule a free initial consultation, contact Hubbs Law Firm online or via phone (305) 570-4802.