There has been many references to money laundering in the news media lately. But for many, just what that entails may be confusing. This week's post will attempt to break down the offense and define what money laundering is and is not.
The term "money laundering" accurately describes what happens when profits from illegal ventures become legitimized. While, of course, there is no soap or water involved in the process, by obscuring the origins of "dirty money" from the sale of illegal drugs or weapons, it becomes "clean" and can then be recirculated through legitimate channels.
One form of money laundering involves converting black market profits into untraceable currencies. The funds may undergo several permutations before re-emerging as an acceptable form of payment for alleged goods or services.
Sometimes money launderers allegedly use offshore accounts to stash funds that can't otherwise be legally acknowledged. Lax banking laws in countries with strict privacy policies have enabled this practice to thrive. Since the terrorism on 9/11 and subsequent attacks, this method has become more difficult to successfully erase the taint from the ill-gotten gains, however.
Another common scheme associated with money laundering is structuring, sometimes referred to as "smurfing," which is done by diversifying the funds into numerous accounts in amounts just under the reporting amounts. Sometimes, the money launderer uses dirty money to purchase a series of properties located overseas. Alternatively, he or she may invest the funds in business transactions under different aliases in several countries.
Unfortunately, sometimes even innocent financial transactions can be mistakenly targeted as one of the laundering schemes referenced above. If you have been subjected to this kind of targeting, it is best to get out ahead of the charges by contacting effective legal counsel as soon as possible.
Source: WiseGEEK, "What are the Different Money Laundering Methods?," accessed Jan. 26, 2018