When criminals earn money through illegal activity, such as drug distribution or organized crime, they usually cannot use their profits for legitimate purposes until they can conceal that their funds came from criminal activity. Criminals use a process known as money laundering to hide the fact that their money came from illegal ventures.
However, the law makes it illegal to launder illicit funds or participate in transactions, knowing that the money came from criminal activity. Since the government treats money laundering as a serious offense, you need an experienced criminal defense attorney to protect your rights and future if you’ve been arrested and charged with money laundering.
What Is the Legal Definition of Money Laundering?
Money laundering is a financial scheme designed to conceal the source and identity of money obtained through criminal activity. Criminals use money laundering to make the profits of their criminal activity seem legitimate. They can use those funds for legitimate purposes, such as depositing funds with financial institutions, purchasing property, paying for everyday expenses, or making it seem like they have a legitimate income source.
What Does Money Laundering Mean?
Money laundering allows criminals to use the money they make through criminal activity. Criminals often deal in cash, which can be difficult to use in large amounts for ordinary purposes. A criminal might raise suspicion if they tried to pay for a home or vehicle with cash. Criminals may want to have bank accounts or credit cards but would have trouble using money obtained through illegal activity. Money laundering conceals or disguises the source and nature of funds obtained through criminal activity through seemingly legitimate transactions.
Money laundering involves three steps: placement, layering, and integration. During the placement step, criminals put their cash into the legitimate financial system, such as convenience stores, barber shops, salons, bars, or restaurants. Criminals frequently use legitimate businesses that usually get paid in cash as fronts to inject their money into the financial system. The criminals’ money gets mixed in with the money of legitimate customers.
During the layering steps, money launderers will conduct various transactions and use bookkeeping tricks to make the criminals’ money seem clean or to make it impractical to differentiate between criminal money and legitimate money.
Criminals may withdraw money from a legitimate business account during the final integration step. They may also have their business front conduct additional transactions with the money to conceal further the nature and source of the money, such as buying real estate.
Money laundering may take other forms. Large amounts of money could be broken into small deposits, more likely to avoid detection, or smuggled to another country with less strict anti-money laundering policies where they could be deposited into banks. The money could later be wired out of the foreign country.
Federal Money Laundering Laws
The federal money laundering statute makes it illegal to conduct or attempt a financial transaction knowing that the transaction involves the proceeds of unlawful activity:
- With the intent to promote continued unlawful activity
- To engage in tax evasion
- Knowing that the transaction will conceal or disguise the nature, location source, ownership, or control of proceeds of unlawful activity
- To avoid transaction reporting requirements under state or federal law
The law also makes it illegal to transport, transfer, or transmit (or attempt to do so) any monetary instrument or funds:
- From the U.S. to outside the country
- To the U.S. through a place outside the country
- With the intent to promote the continuance of unlawful activity
- Knowing that the funds represent the proceeds of illegal activity
- Knowing the transaction will conceal the nature, location, source, ownership, or control of the funds
- To avoid a transaction reporting requirement under state or federal law
Finally, the law also makes it illegal to knowingly engage or attempt to engage in a monetary transaction involving criminally derived property valued at more than $10,000 when the transaction occurs in the U.S. or the special maritime and territorial jurisdiction of the U.S. or the defendant is a U.S. person.
Penalties for a Money Laundering Conviction
A conviction for money laundering under federal law carries penalties that may include prison time, fines, and civil penalties. In most cases, a money laundering conviction has a maximum sentence of 20 years in prison, a fine of greater than $500,000 or twice the value of the laundered money or property, and a civil penalty of greater than $10,000 or the value of the laundered money or property.
A conviction for knowingly engaging in a monetary transaction involving criminally derived property carries a maximum penalty of up to ten years in prison and a fine of up to twice the value of the criminally derived property involved in the transaction.
How an Attorney Can Help with Money Laundering Charges
The government considers money laundering a serious criminal offense because it helps facilitate other criminal offenses, such as drug trafficking, organized crime, and terrorism. When you’ve been charged with money laundering, you need experienced legal counsel who can help you with an effective defense strategy. A knowledgeable criminal defense attorney can help you face money laundering charges by:
- Independently investigating your case to obtain all available evidence, including evidence, documents, or witnesses not located by the prosecution
- Explaining your charges to you and advising you of potential outcomes and what to expect during prosecution
- Reviewing the facts to identify potential defense strategies, such as arguing that the funds came from legitimate sources or that you had no knowledge of the illicit source of the funds
- Challenging the government’s case at the preliminary hearing and in motions to exclude evidence or dismiss your charges
- Aggressively pursuing the best possible resolution to your charges, including taking your case to trial if you choose to fight your charges
Contact a Criminal Defense Lawyer to Learn More About Money Laundering Laws
If you’ve been arrested and charged with money laundering, you may face significant consequences from a conviction. Get legal help from an experienced criminal defense attorney who will fight to protect your rights, reputation, and freedom. Contact De Castroverde Criminal & Immigration today for a confidential consultation to discuss your legal options for facing money laundering charges.