Legal Term Tuesday: Money Laundering

Law

Legal Term Tuesday: Money Laundering

Justin Lavelle

February 23, 2016

This is the latest entry in BeenVerified’s legal term library designed to help you better understand public record information, criminal records and related terminology. The information in this article is provided for informational purposes only and does not constitute legal advice.

You might know that money laundering is associated with organized crime families, as well as a wide variety of other criminal activity. But what exactly is money laundering and how much money is “laundered” each year? And how serious a crime is it? Read on for the answers.

Money laundering is a serious crime because it typically is the process used to cover up other serious crimes. According to the Free Dictionary by Farlex, money laundering is “the process of taking the proceeds of criminal activity and making them appear legal.” Money laundering is the crime that makes an ongoing criminal enterprise possible. The UN estimates that between 2-5% of global GDP is laundered each year by criminal organizations.

So how does money laundering work, exactly? Unfortunately, there are endless variations of money laundering as criminals iterate new variations to funnel the funds from their illegal activities–such as drug dealing, racketeering and extortion—into the legal economy. The key point about money laundering is that to be convicted, you must be shown to be attempting to conceal the proceeds of illegal activity, not merely spending it, according to NOLO.

According to LegalDictionary.net , examples of money laundering include the use of criminally derived funds to purchase and subsequently sell real estate to generate legitimate cash. Other money laundering activities include the physical smuggling of money across borders, “smurfing,” which is the process of taking large sums of illegal money and breaking it up into small deposits or transactions to avoid detection, and casino laundering, where a criminal takes cash into a casino, plays for awhile and then cashes out the remaining chips and claims them as gambling winnings.

Larger scale money laundering operations include embezzlement, where the sums of commercial transactions are misstated in order to integrate illegal money within a seemingly legitimate sale and also bank capture, when a financial organization is partly or wholly owned by a criminal organization, giving them access to wire transactions and other commercial bank services to funnel illegal cash through.

Money laundering is “almost always” charged as a felony offense according to NOLO. This means if convicted an offender is looking at prison time, huge fines, possibly probation and certainly a big black mark on his or her public record.

Notable money launderers include Pablo Escobar, Al Capone and ex-leaders of Nigeria and Indonesia to name but a few, according to BusinessPundit.

Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.