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Money laundering is a term used for the unlawful process through which illegitimate assets are converted into superficially legitimate assets. Illegitimate assets include the money or assets acquired through illegal activities such as embezzlement, corruption or drug trade. In order to conceal the actual origin of these illegal funds, people engage in money laundering. Otherwise, a rapid increase in a person’s wealth without an apparent legal means of income can raise the suspension of local law enforcement agencies. This would prompt an investigation into the source of income and thus reveal their involvement in illicit activities.
How is money laundering done?
Money laundering is akin to washing dirty money to make it seem clean. There are generally three steps involved in any money laundering operation –placement, layering and integration. The illegally obtained money is placed through various mediums such as paying off loans or investing in gambling or blending funds with legitimate funds. For instance, a front company or business is acquired and the illicit money is channeled through that business via fake sales. The placed money is further layered by purchasing and selling different assets which make it difficult to ascertain to the actual origin of the money. The final stage of integration involved the return of the illegal money back to the criminal in the form of legitimized funds. It’s a complex procedure which can take months, even years to complete.
Why is money laundering a crime?
The main reason why money laundering is considered a federal crime is the adverse impact it has on the overall economy of the country. Money that has been laundered is mostly untaxed, which creates disparity in the tax revenue increasing the burden on law-abiding citizens to pay more taxes. Apart from that, front businesses for criminals laundering their money make it difficult for small legitimate business owners to compete. Lastly and most importantly, money laundering also allows crime to thrive. As criminals are able to launder the money they obtained through corruption, they continue to obtain money via illicit means.
What is the punishment for being involved in money laundering?
Due to the nature of the crime, the federal law has strict penalties for those involved in money laundering. Under federal law, a person can be sentenced up to 20 years in prison for being involved in money laundering. Since the money laundering process is quite complicated, people often become involved in it without being fully aware that they are becoming complicit in a federal crime. If you find yourself in a situation where you are wrongly accused of being involved in money laundering, you must seek the guidance of an experienced criminal defense lawyer.
For further information or to schedule a free consultation, contact Ettinger & Besbekos, today at (847) 278-8657 to speak with an experienced criminal defense.