This Weeks' Topic

Money Laundering

What is money laundering, and how can we stop it? The amount of illegally gained money that is "laundered" and made to look legitimate is estimated in the hundreds of billions of dollars worldwide each year. Money laundering doesn't just allow criminals to get away with their crime, it also funds terrorist groups, fuels the illegal drug trade, and undermines the international economy.

How big a problem is this?

Laundered money funds terrorism, fuels the illegal drug trade, and undermines the economy. It is estimated that hundreds of billions of dollars are laundered each year worldwide.

Let's break this down. Why would someone need to launder money? 

Cars, houses, any property that is purchased with drug money or by an illegal means can be confiscated if the criminal is latter convicted.

Also, large amounts of unexplained money can draw attention or suspicion, to a criminal trying to hide from law enforcement.

Money laundering takes dirty money and moves it through a variety of different banks or investments until the trail between the money and the crime can't be followed. At that point, the criminal regains the money through an apparently legitimate means, and is then free to spend it. 

What other scams are used to launder money?

For years people linked Las Vegas with the mob, because Casinos are a great place to launder money. You can easily convert cash into chips and later return the chips for a casino check. Another scheme is giving money under the table to an associate, who then "loans" it back to the criminal. 

Real estate can also be used. For example, you can find a cooperative seller who sells the property for less than the asking price. The buyer pays the seller the balance under the table. The buyer then sells the property on the open market for full price and the profit on the deal appears to be legitimate/ clean money. 

How does the U.S. government fight money laundering? 

The Patriot Act of 2001 closed a few of the loopholes in the Money Laundering Control Act of 1986. A conviction can carry up to 20 years in prison. Banks face severe penalties for accounts used for criminal funds.

If you co mingle criminal money with legitimate money, the entire account can be confiscated by the government.

Disclaimer
This information is general and may or may not apply to your situation. The information contained on this web site is not to be considered as legal advice. Since no two cases are identical, we recommend that you contact an attorney in your jurisdiction to discuss the specific facts of your case. Furthermore, since statutes and case law change so frequently and due to information provided by other sources, we make no warranty or guarantee concerning the accuracy of the content of this or any other web sites to which we link.