Each year the US government prosecutes hundreds of people for money laundering. As new markets arise both at home and overseas, so do cases of money laundering. Globally, not all banks are forced to report suspicious activity, whereas some are. Transferring high sums of money becomes easier as the steps taken to track them become harder.
Money laundering is a simple case of transferring money, usually from country to country, to obscure where it all came from and to fool authorities into thinking all of their illegally obtained money came from legit sources. Money that is found to be linked to criminal activity is then seized by law officials.
Common Criminals:
-Drug Dealers: Drug dealers usually deal with large amounts of cash, making it difficult for authorities to make a paper trail. Large amounts of cash raise red flags.
-Mobsters/Gang members: Like drug dealers, these individuals perform many cash transactions while maintaining safe networks overseas.
-Bad Politicians: With greater access to money and lobbyist networking, the act of money laundering can seem to be one of the best way to protect one’s assets.
-Bad Public Officials: Mainly, anyone in a position of authority whose actions normally go unquestioned will take advantage of an opportunity like this.
-Embezzlers: Cases have proven that people who have taken money from an employer or their own place of business will normally partake in activities to hide these newly acquired assets.
-Con Artists: Any person willing to deceive someone out of their assets is more than willing to clean up his or her tracks.
-Terrorists: Terrorists are big in money laundering. Terrorist activities must be financed, otherwise explosives and other weaponry would not be an obtainable asset.
As complicated as the process of money laundering is, there contains three primary steps: Placing, Layering, and Integrating.
Placing: is essentially depositing the “bad” money into a well-established financial institution such as a bank. More often than not the deposit is made in cash. This can be a very risky move, depending on if the bank abides with bank-secrecy laws or bank-reporting laws. Sometimes, the launderer will diverse his “earnings” over a number of banks to decrease the deposited amount.
Layering: is the most complex step in the laundering process. This involves channeling the money through financial institutions with the intent of obscuring its origins. Launderers may purchase expensive items such as jewelery, yachts, or cars in order to change the money’s form. Again, obscuring the source is key.
Integrating: is the last step in the process where the tender enters the economy with the appearance of being legally earned through a legal transaction. Here the money launderer can figure out how he or she will use his or her resources, such as a privately owned company, to make “company profits” or “company expenses”.
To find out more about money laundering and what the consequences are, contact the Manhattan business attorney, Ellen Rothstein.
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