The simple definition of money laundering is “a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money.” In other words, it is a scheme in which money that comes from illegal (dirty) sources appears to come from legitimate (clean) sources.
While the definition may be straightforward and simple, the crime of money laundering is anything but. The 2018 National Money Laundering Risk Assessment—a study compiled of information from the U.S. Department of Justice (DOJ), the Department of Homeland Security (DHS), U.S. regulatory agencies, as well as federal, state, and private sector research—concludes that an estimated “domestic financial crime, excluding tax evasion, generates approximately $300 billion of proceeds for potential laundering.”
Money is sometimes laundered through instruments such as life insurance policies, securities, or real estate. Legitimate businesses are also used to launder money. They’re often small-to-medium-size operations that are cash-intensive, and may include:
- Tanning, nail, or beauty salons
- Used-car dealerships
- Car washes
- Check-cashing/money services businesses (MSBs)
Moreover, it’s fairly common that these establishments were already in operation as honest businesses. Legitimate businesses may be purchased for the sole purpose of laundering money without the former owners or staff who stay on having a clue as to what’s happening. Criminals depend on that. As stated in a 2019 Bloomberg New s article: “It’s difficult to tell the difference between legitimate business and illicit flows from criminal activity. Launderers sometimes work with real companies that generate lots of cash, merging their funds before they head to the bank.”
Steps to take if you’re facing money laundering charges
If you’ve been accused of or charged with money laundering, you have likely been under investigation for some time by powerful federal law enforcement agencies, such as the FBI, the Financial Crimes Enforcement Network of the Treasury Department, or, in certain cases, Immigration and Custom Enforcement (ICE), along with state and local law enforcement agencies.
Law enforcement looks for the “three stages” of money laundering when building their case:
- Placement: This is process of moving illegally-gotten gains (dirty money) derived from drug trafficking, human trafficking, prostitution, illegal gambling, extortion, or other criminal acts, into a legitimate economy.
- Layering: By involving multiple financial transactions, criminals try to create confusion and make it more difficult for law enforcement to detect the money-laundering scheme. “Smurfing” is the term used to describe the act of breaking down large amounts of cash into small deposits; or purchasing money orders, and later depositing them.
- Integration: This is the final stage, which involves putting the “clean” money back into the economy, such as through purchasing real estate.
A federal statute passed in 1970 as the Currency and Foreign Transactions (popularly referred to as the Bank Secrecy Act, or BSA) requires that banks and other financial institutions “keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities.”
Today, banks have become increasingly sophisticated in rooting out money-laundering. The BSA and the Anti-Money Laundering (AML) regulations have been bolstered by anti-money laundering initiatives under Title III of the USA Patriot Act, which specifically addresses money-laundering as a way to finance terrorism. This increases scrutiny by, among other things, ensuring “that all appropriate elements of the financial services industry are subject to appropriate requirements to report potential money laundering transactions to proper authorities, and that jurisdictional disputes do not hinder examination of compliance by financial institutions with relevant reporting requirements.” Bitcoin and blockchain dealings are likewise scrutinized by the IRS through a company that tracks cryptocurrency transactions.
If you believe you have been accused of, charged with, or believe you are under investigation for money laundering, it is imperative that you:
- First and foremost, contact an attorney with experience in criminal law. Federal agencies patiently build their case against those whom they’ve charged with money laundering. Defending you against those charges takes special skill and knowledge of U.S. government regulations and laws.
- Do NOT discuss the case with anyone but your attorney. Don’t talk about it with friends or family, don’t resort to social media and, especially, refrain from talking to law enforcement without your lawyer present. Remember: anything you say can and will be used against you in a court of law.
- Gather any and all evidence you can to refute the charges. This includes financial records, bank statements, and any other pertinent documents. Gathering and organizing this information helps your attorney build a solid defense case.
Penalties for money laundering
Money laundering charges usually include other criminal offenses, such as narcotics trafficking, illegal sales of weapons, smuggling, tax evasion, counterfeiting, various fraud offenses and racketeering activities under the RICO statute, and a host of other state and federal violations. The penalties for a man convicted in a recent money laundering case in Cheyenne included six years in prison, restitution of $78,432, nearly $78,000 in unpaid taxes to the IRS, $700 to the Wyoming Division of Criminal Investigation, and $1,000 in special assessments.
In general, a criminal conviction for money laundering under U.S. Code § 1956 may include:
- Fines of up to $500,000 or twice the value of the property involved in a transaction, whichever is greater, for each count
- Imprisonment for up to 20 years, for each count
- Asset forfeiture
In addition to penalties for criminal charges, civil penalties may also be exercised. Criminal charges may also be brought separately for the crime that the money laundering was intended to conceal, and may be brought under state, local, or federal law.
Serious money laundering charges require a serious defense team
At Davis & Cannon, LLP, we know that even an accusation of money laundering can harm your reputation and your relationships. A conviction can rob you of your liberty, your livelihood, and everything you’ve worked hard to earn. If you have been charged with or arrested for a money laundering crime—or even suspect that you are under investigation—contact us or call our office at (307) 672-7491 for a free and confidential consultation with one of our experienced Wyoming criminal defense lawyers. We have offices in Sheridan, Cheyenne, and Gillette.