Although it is probable that most people have heard of the term “money laundering,” many people are still unsure as to what constitutes money laundering. Money laundering occurs when a person attempts to denominate money derived from illegal sources as having actually come from a legal and legitimate source. The primary purpose of money laundering is to disguise the origin or manner in which certain money was obtained.
Money laundering is a popular conduit that criminals use to hide the real source of illegally obtained money. Money that is obtained either from an unlawful source or in an unlawful manner, generally as a result of criminal activity, cannot be used. In most jurdsdictions, law enforcement agencies are legally authorized to seize money that was a product of money laundering. When money is laundered, it gives the appearance that it was obtained by legitimate means and thereby has the ability to be used.
How Does Money Laundering Occur?
Money laundering usually occurs in a three stage process as follows:
(1) Placement occurs when money launderers insert the unlawful money into financial institutions such as banks. This is the riskiest step as a function of what has progressively become stricter federal financial reporting requirements for large scale transactions. Red flags can be and are often raised whenever either a single large deposit is made or a series of smaller deposits adding up to a large amount of money are made in a relatively short amount of time.
(2) Layering is perhaps the most complex step for money laundering. Here, launderers attempt to make the money untraceable by making multiple transactions in different financial institutions, making large purchases, or even altering the money’s currency.
(3) Integration occurs whenever the laundered money reenters the economy. Typically, this is disguised as a legal transaction–whether the purchase of property, the investment in a company, or some other manner–and is designed with the intent of leaving no connection the launderer(s).
Where Does Money Laundering Occur?
While money laundering is not limited to any specific industry, it is most famously known by its connection with drug-related businesses, terrorist activity and with organized crime activities. The common denominator is that many of these activities deal almost exclusively with cash.
Still, money launderers are not just the organized crime gangsters found on television shows about mobsters. Money laundering is also often found in white collar criminal endeavors. Professionals such as bankers, traders and politicians are frequently engaged in corrupt practices that require money laundering to “clean” the “dirty money” that’s been obtained through some unlawful practice.
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Regardless of whoever is engaging in money laundering, one common constant remains the same: money laundering is unlawful and being caught laundering money is likely to result in serious legal repercussions. Still, if you are charged with laundering money, you have a right to a defense. Challenging a money laundering charge requires developing a sound legal strategy. At The Law Office of Stephan Jacob Siegel, you will find the years of experience necessary to fight those charges against you. Call a New York criminal defense attorney at (718) 575-3900 and schedule your consultation today.