Federal Criminal Defense Lawyer
How Money Laundering Works
Dealing with large sums of illegal cash can be dangerous and unproductive for criminal organizations. To effectively use money obtained illegally, launderers must deposit the money in legitimate financial institutions. However, they can only do this if they can convince the financial entity the cash is coming from a lawful source. To help prevent the illegal use of funds, financial institutions are required to report suspicious activities, such as large cash deposits.
There are three stages that money launderers use to conceal and move the money they have obtained through illicit means. Below are the three main phases of financial laundering:
• Placement: During the placement phase, the illegally obtained funds are placed under the control of a legitimate financial institution through discreet, illegal means. For example, some launderers use a legitimate business to act as a conduit for money obtained through illegal activities.
• Layering: During this phase, financial transactions are carried out by moving the funds around. Using methods that are difficult to trace, the money is often transferred or wired to an offshore account.
• Integration: During the integration phase, the laundered funds are withdrawn from a legitimate-appearing account and used for illegal purposes. Funds are then often withdrawn from a legitimate account to support further criminal activities.
Launderers often use legitimate, cash-based businesses to carry out their criminal activities. These types of businesses are usually referred to as fronts.
Electronic Money Laundering
Money laundering has become even more prolific with the rise of the internet and mobile devices. With online banking systems, mobile transfer platforms and anonymous online payment services, it has become increasingly difficult for the authorities to detect the illegal transfer of money. Further, the use of proxy servers and discreet software has made it possible to transfer or withdraw money without leaving behind the trace of an IP address.
New developments such as cryptocurrencies have made money laundering even harder to detect. While cryptocurrencies such as Bitcoin are not completely anonymous, they are commonly used in the drug trade, blackmail schemes and other criminal activities. Anti-money-laundering regulations have been slow to include cybercrimes. Many laws still focus on detecting money-laundering activities through brick and mortar banking institutions.
Defending Against Money Laundering Charges
The U.S. government uses several federal statutes including the Money Laundering Control Act of 1986, the Bank Secrecy Act and the Patriot Act to invest and prosecute money laundering activities. Programs to detect illegal laundering activities in the U.S. have increased in scope in the last several years and criminal penalties have increased in severity as well.
However, just because you have been accused of a crime does not mean the prosecution can prove that misconduct has taken place. To get a conviction in federal court, the prosecution team must prove you committed the act of money laundering and that you did so willing to conceal illegal activity.
The key to successfully winning a money laundering case is refuting the evidence and outlining an alternate version of events. Money laundering is considered a “specific intent” crime in the eyes of the court. This means that the accused must have had a desire to commit a crime and an intent to accomplish a specific result to be found guilty. The following are specific defenses that a lawyer may use to defend you at trial:
You did not perform any illegal activity
You were not aware the money came from illegal activity
The funds were not obtained from an unlawful activity
You participated in unlawful activity due to duress
This is not a comprehensive list of the defense strategies that may be used in a money laundering case. Your attorney will construct the best defense based on your situation.