Money laundering is a very serious financial crime, whether committed by a teenager on the street or by a white-collar financial manager. Money laundering is the process of taking money generated illegally and disguising it to make it appear as if it were earned through a legitimate source or business. The term comes from the idea that illegal money is “dirty” and goes through a cleaning process. Any variant of money laundering and any technique used to make the illegal money appear legitimate falls into this crime category. A money laundering lawyer is necessary for any criminal, so if you or a loved one has been accused, charged, or convicted of money laundering, reach out to Lowther Walker, LLC today.
How Money Laundering Works
Converting illegally obtained cash into usable money can be done in a number of different ways, but it usually involves three steps:
Because it is dangerous and inefficient to deal with large sums of cash, criminals must find a place to put it. They must be creative in how they deposit such large amounts of money because financial institutions are required to report cash deposits, withdrawals, and money orders or cashiers’ checks larger than $10,000 each day. Criminals must place large amounts of cash where it won’t get noticed, which is the highest risk part of the process.
This is the stage during which the illegal money is disguised using a series of financial transactions geared to be complicated or confusing, so that investigators would have a difficult time identifying the dirty money. This could be a series of deposits in multiple bank accounts for multiple individuals, purchasing of property, or transactions with shell companies.
This is the final step in which laundered money can be withdrawn again and used for whatever the criminal wants. This part of the process comes with the lowest risk.
This is a broad, general overview of the money laundering process, and some cases will contain more than just three simple stages. Some white-collar criminals in need of a money laundering lawyer will have cases in which investigations will take months, if not years.
Types of Money Laundering
Even though they all fall under the money laundering umbrella, there are several common variants of money laundering. One of the most common ways to launder money is through a process referred to as “smurfing.” During this process, a criminal distributes large amounts of cash into many small deposits in order to avoid being noticed. Money laundering can also be done through “mules,” who are cash smugglers who get paid to sneak cash across borders in order to deposit it in foreign accounts. Other methods include investing in shell companies, which are a front for illegal actions.
Online Money Laundering
With the rise of online banking and the proliferation of peer-to-peer transfers using mobile phones, it is now more difficult to detect the illegal transfer of money. Software can be used to make transactions anonymous, making integration impossible to catch. Online auctions, gaming sites, and gambling websites also provide ample opportunity for illegally obtained funds to be cleaned by becoming gaming currency before being turned back into useable funds.
Even more than anonymous online money transfers, new cryptocurrencies like Bitcoin or Dogecoin are being used by hackers in ransomware schemes and drug trafficking because they are more anonymous than traditional forms of banking and exchanging currency.
Protecting and Preventing Against Money Laundering
As previously mentioned, financial institutions are required to report large or suspicious transactions. These banks have dedicated a lot of manpower, money, and resources to preventing criminals from placing money in their systems. Additionally, the government has been more active in fighting against the rising number of money laundering crimes. Because of so many businesses conducting international affairs, plus the rise of online mobile banking and cryptocurrencies, some governments are now equating preventing money laundering with combatting terrorism. Sometimes people get confused between bank fraud and money laundering due to similarities.
Whether committed in the US or abroad, money laundering is a serious crime, and if convicted, criminals can face significant jail time and hefty fines. A money laundering lawyer can help if you believe you’ve been part of a money laundering scheme or if you’re facing charges of money laundering.