Of all criminal charges, white-collar crimes and financial crimes are among the most complex. These cases involve paper trails, financial reports and complex laws. One of the most common allegations against companies and individuals is money laundering.
Money laundering occurs when a person makes a financial gain through illegal activity. Then, said person or institution will take the money and attempt to legitimize it. After money laundering, it is difficult to connect the funds to how the individual gained them.
Using the financial system
USA Today explains that to wash money, a company or individual must place the money into the financial system. Once in the system, they can avoid the attention of other financial institutions or law enforcement agencies. Generally, a person would deposit amounts below the reporting requirement. Banks have a reporting requirement of $10,000.
Another way to place money is to combine it with legal money. This creates less suspicion when the money enters the financial institution.
Layering the money
To layer money is to create a complicated paper trail. This prevents investigators from easily picking up on laundering. Someone may shift the money through several transactions, wire or transfer different amounts of money through the U.S. or foreign banks.
Integrating the finances
To complete the laundering process, a person would try to supply a reasonable explanation for the money. He or she may purchase real estate, then sell it and use the sale as an explanation for the illicit funds. Real estate transactions have become a target of investigations. With high penalties, money laundering charges can destroy a company’s reputation.