Money laundering is a serious criminal offense involving making illegally gained proceeds appear legal. But while it’s a crime, it’s not an end but a means to an end.
Each U.S. state has laws prohibiting money laundering, but the offense is also punishable under federal law. The federal government regulates and protects the integrity of the nation’s financial system. It won’t hesitate to go after offenders who compromise the stability of this system.
Money laundering defined
Under federal law, anyone who conducts or attempts to conduct financial transactions knowing that the money involved came from illegal means commits money laundering. Specifically, a person commits money laundering if the transaction either:
- Promotes the carrying on of unlawful activity; or
- Was performed in an attempt to evade taxes; or
- Was performed to conceal assets and allow the offender to make false statements
There are various reasons why an individual chooses to commit money laundering. They could be trying to conceal illegal activities. Or they’re attempting to avoid paying taxes. Perhaps they’re trying to protect their assets from government forfeiture. It’s also not unusual for some to invest their illicit gains into legitimate business ventures to grow their wealth.
Regardless of the reasons, intent is important for a money laundering charge to stick. The offender must have knowledge that the transaction they’re performing is designed to conceal the nature, location, source, ownership or control of the proceeds of the specified unlawful activity.
The penalties
If a federal court convicts a person of money laundering, they’ll face a prison sentence of up to 20 years and $500,000 in fines. Alternatively, a court can order them to pay twice the value of the property involved in the transaction, whichever is greater.
Money laundering is not a victimless crime. It fuels corruption, undermines financial systems, and supports criminal enterprises. Understanding the laws and potential penalties is crucial so that individuals and institutions can prepare for compliance and prevention. For those facing charges, it is critical to seek legal advice to navigate the complexities of federal laws and build an effective defense strategy.