Money that is made illegally is sometimes funneled through legal channels to make it appear as if it was obtained lawfully. Doing this is a criminal act known as money laundering. You can face time in prison or fines when you are convicted of this crime.
There are several ways that money laundering can occur but these aren’t always perfectly clear. It is sometimes possible that you can commit this crime without even realizing that you are doing it. Here are some important points to know about money laundering:
Purpose of money laundering
A person who is laundering money is trying to make it seem like clean money. This means that he or she is taking money that is earned through illegal means, such as drug sales, mafia transactions or other similar ways, and funneling it through a legal channel. In some cases, this can mean simply depositing it into a bank account, but it can also happen in other ways.
Sometimes, people will invest illegally earned money into a lawful venture. For example, money earned from mafia activities might be used to rent a nightclub for an event. If it comes to light that the money to rent to nightclub was obtained illegally, the person who organized the event may find him- or herself in legal hot water.
Mandatory reporting
Some financial institutions are required to report specific financial transactions to the federal authorities. Large transactions, which currently includes more than $10,000, must be reported to the U.S. Department of Treasury. Financial institutions must also report any transaction that seems suspicious. These requirements are set by a series of laws that went into effect in 1970. They have evolved and more have been added, including the U.S.A. Patriot Act, which was enacted in response to the terrorist attacks that occurred on Sept. 11, 2001.
Facing money laundering charges
Many federal money laundering charges are only levied after a lengthy investigation. There is often a long paper trail that comes with them. If you are facing this type of charge, a lot is on the line. Give yourself time to to review your options for a defense strategy thoroughly.