If a person is making a large amount of money through illegal means, their crimes can be quickly discovered if they don’t take care to conceal the origin of their profits. This is the reasoning behind money laundering.
Money laundering is a way of concealing the illegal origins of money by making it appear to have a legitimate source.
An example
In a relatively simple example, a restaurant owner might make a large amount of money on the side by selling illegal drugs. If the restaurant owner takes the drug profits and simply deposits them into their personal savings account, the unexplained large deposits may attract the attention of the authorities. To minimize that possibility, the restaurant owner claims that the money actually comes from their legitimate restaurant business.
Thus, they launder the “dirty” money by running it through an apparently “clean” business.
In many cases, money laundering schemes are much more complex than the example above. Often, criminals will attempt to launder their assets by using another party’s business. In exchange, they will give a percentage of the profits to this third party.
The Department of Justice claims this is what happened in a recent case involving a New Jersey auto business.
The New Jersey case
According to the Justice Department, a New Jersey man helped conceal millions of dollars in a fraud scheme run in another country. The Justice Department says the man received the assets from the fraud through his auto business, depositing more than $5.7 million into multiple bank accounts.
Although the funds appeared to go into the business’ accounts, in fact he kept only a percentage, and returned most of the money to the people running the fraud.
The man was arrested in early 2021 and was convicted this year of seven counts of money laundering charges. He was sentenced to 78 months in prison and ordered to forfeit more than $290,000.
Money laundering crackdown
Over the years, as money laundering schemes have grown more elaborate, the law has tried to keep pace. Financial institutions and others now face many regulations that order them to report transactions that appear suspicious.
As a result of all this complexity, it’s increasingly possible for third parties to be involved in money laundering schemes they don’t understand, and possibly don’t even know are illegal. And it’s increasingly possible for these people to get caught.
Everyone has the right to a defense. An experienced white collar crime attorney can help people understand their options after they have been accused of money laundering.