Money laundering is a serious crime that can lead to thousands of dollars in fines and a lengthy incarceration period. If you obtain funds illegally and then, through a series of financial transactions often involving a shell company, hide the true source of the funds to make it seem like the funds were obtained legally, this is considered money laundering. There are three steps in the money laundering process.
What are the three steps in the money laundering process?
The first step in the money laundering process is the receipt of illegally obtained funds. The second step in the money laundering process is a series of financial transactions aimed at concealing the source of the funds. The third step in the money laundering process is the return of the funds to you in a manner that is indirect.
What is a shell company?
Money laundering often involves the use of a so-called shell company. A shell company is a business that does not hold any real assets and does not engage in any legitimate business activities.
The shell company will look like it needs customers to make cash transactions as evidenced by fake invoices and receipts. Cash is often used in money laundering schemes because the source of the cash can remain anonymous, and cash payments are more difficult to track.
In a money laundering scheme, you place funds in the hands of the shell company, and these funds are deposited in the shell company’s accounts under the guise of a legitimate financial transaction. Next, the shell company withdraws these funds and funnels them back to you. This makes it seem like the funds were garnered legally, when in fact they were not.
The federal government takes money laundering seriously
Money laundering is a serious crime and will be heavily penalized. Not only can the perpetrator of the money laundering be criminally convicted, but so can anyone who knew of the scheme and did not report it to the appropriate authorities. Knowing what constitutes money laundering is a good first step in developing the defense strategy you need to protect your freedoms.