The term “Money Laundering” comes from the word “dirty money” that came from illegal activities or ways while trying to make it look “clean” by channeling funds through bank accounts or any business. California law has different statutes for money laundering: Penal Code 186.10 PC that covers money related to any crime, and California Health and Safety Code 11370.9 HS that only deals with money earned or came from drug crimes.
Under the California Penal Code Section 186.10 PC, money laundering is considered a white-collar crime with severe penalties.
For a person to be charged with a Money Laundering crime, the following elements must take place such as:
- Completing a series of transactions through the use of financial institutions such as banks.
- Transactions mentioned under the law can be a deposit, withdrawal, transfer, or even exchange of funds.
- The transacted amount must be approximately $5,000 in seven days or more than $25,000 in a one-month or 30 day period.
- The transaction was made with the full intent to promote illegal activity, or the defendant is aware that the funds used came from illegal activities.
Because money laundering is a complicated issue, highly profitable criminal groups take different steps or actions to make it seem legitimate. Because dealing with laundered money can be easily traced if done wrong, most criminal groups involve three steps to “clean” their money.
This step puts the “dirty money” into other legitimate financial systems such as businesses. These often involve dividing or separating money into smaller chunks to make it easier to use the money.
This conceals the primary source of the “dirty money” by going through a series of legitimate transactions and other bookkeeping tricks (such as inflating daily cash receipts in the business).
After doing the previous steps above, the money will seem clean and legitimate. The laundered money is withdrawn from these legitimate bank accounts.
Kinds of Money Laundering
One of the most common forms of money laundering is called “smurfing.” Through this technique, criminal organizations divide or break up a significant portion of the illegally obtained money into small chunks of cash and deposit it into smaller bank accounts to avoid detection.
Another way to launder the money is by using currency exchanges, wire transfers, and by using “mules.” This is when cash smugglers sneak large amounts of cash across different borders and deposit them using different foreign bank accounts. This is usually done because money-laundering schemes enforcement in other countries is much less strict with the rise of online banking that can quickly transfer money from one person to another—making detecting or tracing money laundering even harder.
Also, one common way to invest money laundering is through investment in gems such as diamonds, gold, and other very expensive artifacts that can easily be transferred into different places. Some also make investments in other business ventures such as real estate and gambling. Some even use a shell company (inactive companies or corporations that exists only in paper), most commonly known as “fronts.”
Because there are different money laundering schemes, getting involved or accused of being involved can lead to severe penalties and charges. It is essential to call the best legal defense attorney to help you with your case.