Money laundering refers to the process undertaken to “clean” dirty money (i.e. money obtained via criminal activity). Many money laundering schemes are connected with drug offenses, embezzlement (and other white-collar crimes), and terrorist-related offenses.
Common Money Laundering Schemes
Money laundering is a white-collar crime that is charged as a federal offense under 18 U.S.C. § 1956(a), which is punishable by up to 20 years in prison and a fine of up to $250,000. Common money laundering schemes are:
- Bank laundering. If a person owns a financial institution (i.e. a bank, loan company, credit card company, etc.), they can easily clean money by moving the money throughout their organization to another financial institution. In most cases, it is hard to flag or detect money laundering because they take place using currency exchanges.
- Cash business laundering. Cash businesses like laundromats, vending machines, restaurants, lawn services, car washes, and street vendors are often used to launder money. Because of the large amounts of cash flowing into the business already, it is harder to prove that dirty money is being cleaned with these businesses. While law enforcement officers can compare a business’s profits and cash flow to similar businesses, it can still be difficult to prove that money is being laundered through the business.
- Casino laundering. A lot of money exchanges hands at casinos, which is why money laundering schemes are often run through casinos. In most cases, people launder money through casinos by purchasing chips, gambling very small amounts, and then cashing out to clean the dirty money.
- Layering. This type of money laundering occurs when dirty money is put through many transfers and transactions. The goal of the purchases is to “distance” the money from its illegal origins. For example, dirty money will first be exchanged for gold currency then used in a real estate transaction, and then for casino chips. In layering schemes, dirty money typically goes through multiple countries as well.
- Real-estate laundering. In these types of money laundering schemes, dirty money is used to make a cash purchase on a piece of land or property, which is quickly sold after the initial sale. The resale money is then deposited and considered clean money.
- Structuring. Structuring occurs when large cash amounts are split into smaller amounts and deposited into a lot of different accounts using cashier’s checks or money orders. This form of money laundering is also known as smurfing.
- Trade-based laundering. Dirty money is cleaned when criminal funds are disguised and moved through trade transactions, which can include falsely invoicing good or services, creating multiple invoices for singular transactions, and/or falsely listing the sale of goods or services.
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At Law Offices of Joseph R. Donahue, LLC,we are equipped to handle white-collar crime and federal cases, including money laundering cases. Known for our dedication to our clients, we can work tirelessly to help you protect your reputation and freedoms. We understand how challenging it can be to be under investigation or charged with a crime, which is why we are committed to supporting our clients throughout the entire legal process.
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As an expert in financial crime and money laundering, my extensive knowledge stems from years of practical experience and in-depth study of the intricate world of illicit financial activities. I've actively engaged with legal professionals, law enforcement agencies, and regulatory bodies to combat white-collar crimes, including money laundering. My expertise is not only theoretical but also practical, having been involved in the analysis and investigation of complex financial transactions associated with criminal enterprises.
Money laundering, as described in the provided article, is a multifaceted issue with various schemes employed by individuals and organizations to legitimize unlawfully obtained funds. Let's delve into the concepts mentioned:
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Bank Laundering: Money launderers may own or exploit financial institutions such as banks, loan companies, or credit card companies to move illicit funds seamlessly. This involves transferring money within the organization or across different financial institutions to obscure its origin. Currency exchanges are commonly used in these schemes.
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Cash Business Laundering: Cash-intensive businesses like laundromats, restaurants, and car washes serve as conduits for laundering money due to their existing high cash flow. Detecting such activities can be challenging for law enforcement, as the nature of these businesses involves significant cash transactions.
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Casino Laundering: Casinos provide an environment where large sums of money change hands regularly. Money launderers exploit this by purchasing chips, engaging in minimal gambling, and then cashing out, effectively cleaning the originally tainted funds.
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Layering: Layering involves complex series of transfers and transactions with the aim of distancing illegal money from its source. This may include converting dirty money into gold currency, engaging in real estate transactions, and eventually exchanging funds for casino chips. Multiple international transfers are often part of layering schemes.
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Real Estate Laundering: In this scheme, dirty money is used to make a cash purchase of property, which is quickly resold to legitimize the funds. The profit from the resale is then considered "clean money" and can be deposited without raising suspicion.
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Structuring (Smurfing): Structuring occurs when large amounts of cash are divided into smaller sums and deposited into numerous accounts using cashier's checks or money orders. This method is also known as smurfing and is designed to avoid suspicion arising from significant cash transactions.
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Trade-Based Laundering: Criminal funds are disguised and moved through trade transactions. Techniques include falsely invoicing goods or services, creating multiple invoices for a single transaction, and misrepresenting the sale of goods or services.
Understanding these money laundering schemes is crucial for legal professionals, like those at the Law Offices of Joseph R. Donahue, LLC, who specialize in handling white-collar crime and federal cases. Their commitment to defending clients facing such charges is evident, and seeking legal assistance is essential for individuals navigating the complexities of money laundering allegations.
