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What is money laundering?

On Behalf of | Jun 12, 2024 | Criminal Defense

Being accused of money laundering is a serious criminal matter, whether it’s being done on a state or federal level. A conviction for this crime can lead to time in prison, fines and other severe penalties. 

Money laundering is considered a white collar crime, but that doesn’t mean that it’s a victimless crime. There are specific laws that enable financial institutions to watch for signs of money laundering. Those laws also require those institutions to report specific transactions to the government so the possibility of money laundering can be investigated.

What’s the purpose of money laundering?

The purpose of money laundering is to take money that was earned illegally and make it appear that it was earned legally. This often involves multiple steps to try to hide where the money came from. 

The first step is that the money is put into circulation in a legitimate financial system, such as a bank. From there, the money goes through many transactions that might be coupled with falsified bookkeeping records. Finally, the money is taken out of the financial system and used like regular currency. 

Some of the transactions that are used in these cases include investing or buying and selling assets. Gambling and shell companies are other options. Essentially, anything that makes the money appear as though it’s coming from a legitimate source is a possible transaction in a money laundering scheme.

Money laundering cases are often complex and have lengthy paper trails. This makes it critical to have legal assistance to navigate through everything while developing a defense strategy.