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What does it really mean to be accused of money laundering? - II

In the previous post, our blog began taking a closer look at money laundering, a criminal offense that despite being a fixture in popular crime dramas may not be entirely clear to the typical viewer.      

We'll continue these efforts in today's post, providing further background information on money laundering, which, to recap, is process through which an individual seeks to conceal the source, identity and ultimate destination of funds procured through criminal activity.

To recap, federal law dictates that the following elements must be demonstrated in order for a person to be convicted of money laundering:  

  • Conducted or attempted to conduct a financial transaction knowing that the proceeds involved were derived from some manner of unlawful activity
  • Knew that the purpose of the aforementioned financial transaction was to conceal the ownership, location, source, control or nature of the unlawful activity
  • The proceeds involved were in fact involved in specified unlawful activity

It's important to note that the Supreme Court of the United States has determined that money laundering charges can't be brought just because an individual is profiting from criminal activity.

By way of example, consider a person running a gambling ring who uses the proceeds from players to cover winnings.

While the underlying activity is inarguably illegal, the receipt and use of the funds in this manner wouldn't constitute money laundering, as there has been no attempt to actively conceal the funds derived from the underlying criminal activity.

Similarly, consider an individual who owns a rather impressive collection of Chicago Cubs memorabilia, which he or she sells at a profit of $20,000 and intentionally omits from their federal tax return.

In this instance, the conduct in question wouldn't constitute money laundering, as the proceeds involved were not derived from any sort of underlying unlawful activity. Indeed, while the seller clearly committed tax fraud, there was no money laundering given that the act of selling the memorabilia is not criminal in nature.     

We'll conclude our discussion next time, examining a hypothetical example of what a money-laundering operation might look like and the penalties for a conviction.

Consider speaking with an experienced legal professional as soon as possible if you learn that you are under investigation by state or federal officials for money laundering or any other white collar crime.

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Darryl A. Goldberg
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