The term ‘money laundering‘ generally refers to a process of making huge amounts of ‘dirty’ money appear as if it came from a legitimate source. Millions of dollars that came from any illegal activity, such as proceeds of crime, terrorist funding, drug trafficking, or any other criminal activity are often considered dirty. Similar to the normal laundromat, such money will then undergo a process that ‘launders’ them to disguise and conceal them as ‘clean’.
Given the fines, penalties, and other sanctions that come with a money laundering case, any accusation must be taken very seriously. Accused money launderers must seek expert legal representation right away. If you have been involved in money laundering, contact our credible Gold River criminal defense attorneys as early as possible.
This article will focus on the following:
- How Money Laundering Works
- Smurfing and Other Money Laundering Schemes
- Money Laundering Through Electronic Means
- Prevention of Money Laundering Cases
- The Role of a Criminal Defense Lawyer
How Money Laundering Works
Money laundering is a financial crime committed by both street-level and white-collar criminals. It is often committed by criminal organizations so that illegally obtained money or illicit money may be used more effectively. Most financial companies have anti-money-laundering (AML) units since these organizations are crafty in finding ways to deposit the money in legitimate financial institutions and bank accounts as if it came from legitimate sources.
A common way to launder money is to make use of a legitimate, cash-based business that is owned by the organization (called fronts). Funds can be withdrawn from a restaurant’s bank account, for example, after daily cash receipts are inflated and illegal cash is funneled and deposited into the account. As such, banks and other institutions are required to report large cash transactions that could be signs of a money-laundering scheme.
In more specific terms, the process of laundering money consists of the placement, layering, and integration phases. The dirty money is first ‘placed’ before its source is ‘layered’ and concealed through certain financial transactions and bookkeeping tricks. The laundered money will then be ‘integrated’ into a legitimate account, where it can be withdrawn and used by criminals.
Smurfing and Other Money Laundering Schemes
One variant of this crime is known as smurfing (or structuring), where chunks of cash are broken into small deposits and spread over multiple accounts. These smaller financial transactions help the launderer to avoid detection by law enforcement agencies.
Certain money laundering methods would involve investing in commodities that can be moved to another jurisdiction, such as gold and gems. Related to this are gambling, counterfeiting, and discreetly investing in and selling real estate and other valuable assets. Money laundering activities may also involve wire transfers and currency exchanges, through either inactive shell companies (a shell company is often an inactive corporation) or cash smugglers (mules who sneak large amounts of cash across borders and jurisdictions). In all these forms of smuggling, the general idea is to deposit the money in foreign accounts where money-laundering enforcement is not as stringent.
If your name has been dragged in any of these activities, it is best to consult with a credible Gold River criminal defense attorney right away.
Money Laundering Through Electronic Means
Detecting the illegal transfer of money became more difficult due to the rise of online banking institutions, anonymous online payment services, and mobile peer-to-peer (P2P) transfers. Detecting the ‘integration’ phase of money laundering also became more difficult, since anonymizing software and proxy servers enabled the transfer and withdrawal of money with no trace of an IP address. This can make a money-laundering investigation much more difficult.
Money could also be laundered through virtual gaming sites, gambling websites, and online auctions and sales, where ill-gotten money is converted into a virtual currency before being converted back to untraceable and usable money that is ‘clean’. Bitcoin and other cryptocurrencies also became one of the newest frontiers of money laundering, since they are increasingly being used in the drug trade, blackmail schemes, and other criminal activities given the certain degree of anonymity that it gives.
Prevention of Money Laundering Cases
In recent decades, governments around the world have taken several steps to combat money laundering. Every financial institution is required to put systems in place to detect and report suspicious activity, especially when a large amount of money is involved.
The Financial Action Task Force (FATF), for example, is an international committee formed by the Group of Seven (G-7) in 1989. It is an attempt to fight money laundering on an international scale, and its purview was eventually expanded to combating the financing of terrorism. The Banking Secrecy Act of 1970, meanwhile, required financial institutions in the United States to report cash transactions above $10,000, among other suspicious transactions, to the Department of the Treasury. Information of such a suspicious activity report is then shared by the Financial Crimes Enforcement Network (FinCEN) with international bodies, foreign financial intelligence units, and domestic criminal investigators.
The Role of a Criminal Defense Lawyer
Money laundering refers to the illegal process of making ill-gotten money appear legitimate through a wide variety of money laundering techniques. The prevention of money laundering has become an international effort and now includes terrorist funding among its targets, but the rise of online banking and cryptocurrencies enabled money launderers to transfer and withdraw illegally obtained funds without getting detected.
Anti-money-laundering laws (AML) refer to regulations that are meant to prevent a launderer from disguising money from unlawful activity as legitimate income. Violations of money laundering regulations are serious concerns. There are instances, however, when an individual’s name is dragged into these investigations without actual basis.
Money laundering charges must not be taken lightly. If you have been accused of being a money launderer, call our criminal defense law firm and speak with experienced Gold River criminal defense lawyers. Our legal experts at Chastaine Law will fight for you and your legal rights.