Money Laundering

People who engage in illegal activities for monetary gain must cover their tracks to avoid detection by law enforcement. Money laundering is the process by which individuals and criminal organizations use a series of complex financial transactions to make the proceeds of criminal conduct appear to be derived from a legitimate source. Those who are accused of this type of crime in Naples, Fort Lauderdale, and throughout Broward County and  Florida may face serious charges in federal or state court. Individual who are investigated for money laundering are also often investigated for organized crime and racketeering. If evidence is found, those crimes may result in additional sentencing for separate charges, making it essential to hire a money laundering defense attorney immediately after being charged.

Transaction methods

One of the most straightforward ways money laundering occurs is by using criminal proceeds to start a legitimate cash-based business, colloquially referred to as a “front.” Restaurants, stores, and even laundromats are a few examples of many businesses that may serve as a front. The owner passes the illegal money through the business by inflating cash receipts and eventually withdrawing the money from the business’ bank account. Another form of money laundering involves solely using bank transactions to spread the money out. The individual or organization will typically use several bank accounts to divide large sums of cash into smaller sums and make deposits into the various accounts. This tactic is also known as “smurfing.” By dividing the cash into smaller amounts and spreading it out among accounts, money launderers are able to avoid triggering the minimum reporting thresholds U.S. banks are required to follow. Money laundering can also occur through the use of wire transfers or even cash smugglers or “mules” who physically transport cash across international borders into countries in which money laundering is not so closely monitored. People also use illegal proceeds to invest in gemstones and gold, which can easily be transported to other jurisdictions. Other vehicles for laundering money laundering include real estate transactions, gambling, counterfeiting, and setting up shell companies, inactive companies that are solely used for certain financial maneuvers or kept dormant for future use.

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Stages of money laundering

The money laundering process occurs in three stages. During the Placement stage, the criminal proceeds or “dirty” money is placed into the financial system. The individual or criminal organization may repay loans or credit cards with the illegal proceeds, use the money for gambling, smuggle the money into a less watchful jurisdiction, purchase foreign money through currency exchanges, or comingle dirty money with legitimate revenue generated through a front. Florida money launderers are most vulnerable to getting caught during the first stage because they are tasked with discreetly introducing conspicuous sums of money into the financial system without triggering an investigation. After the dirty money has been placed, the next step is the Layering stage, which is also referred to as “structuring.” During the layering stage, the money is often transferred across international borders and invested in overseas markets or financial options. This stage is the most complex as its aim is to further separate the illegal proceeds from the actors, typically by leveraging legislative loopholes and the extensive amount of time it often takes government officials to detect and investigate white collar crimes. The Integration stage is the third and final step in the money laundering process. After being exchanged and invested, the money is returned to the individual or organization from what, at this point, appears to be legitimate investments and transactions. Having now been fully integrated into the financial system, the money can be used however the person or group of people chooses. Those who engage in money laundering still must avoid detection, even after the Integration stage. Therefore, Fort Lauderdale or Naples money launderers will typically use the money to purchase real estate, expensive art, or other high-end items versus maintaining the proceeds as liquid assets.

How do prosecutors prove it?

To obtain a conviction against a defendant for a federal money laundering charge, the prosecution must prove the accused conducted or attempted to conduct a financial transaction knowing the money or property involved in the transaction was representative of proceeds from illegal activity. Specifically, the prosecution must prove the following elements:

  • The defendant knew the property or money involved was the proceeds of a felony under state, federal, or international law; the prosecution is not required to prove the defendant knew the exact nature of the felony. It is sufficient to establish the defendant knew the money was obtained through illegal means.
  • The defendant participated in initiating or concluding a financial transaction that involved the illegal proceeds.

In participating in the financial transaction, the defendant intended to promote the carrying out of illegal activity, intended to commit tax evasion or tax fraud, knew the transaction was designed to obscure or conceal details surrounding the illegal origins of the proceeds, or knew the transaction was designed to avoid federal or state financial reporting requirements.

Federal money Laundering defense in Florida

The best defense against money laundering is to prove the money or property in question was obtained through legal means. A defendant may also argue he or she was not aware the money was derived from illicit activity or that he or she did not attempt to conceal the money or property. An experienced Fort Lauderdale money laundering defense lawyer can help people who are accused of money laundering retrace their transactions to establish their case. Penalties for money laundering conviction are steep as a person who is convicted may be sentenced to a maximum of 10 years in prison for knowingly engaging in a transaction that involves illegally-obtained money or property. If convicted of attempting to promote illegal activity or conceal money that was obtained through illegal activity, a defendant may be sentenced to 20 years imprisonment.

In addition to prison time, those who are convicted of money laundering may also be ordered to pay fines and restitution. Anyone who believes he or she may have participated in a money laundering transaction should immediately contact a Naples, Broward County or Fort Lauderdale money laundering defense attorney to receive a free, confidential case evaluation.