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

Over the last few weeks, our blog has been taking a closer look at money laundering, including the elements that must be proven by federal prosecutors in order to secure a conviction and an examination of what type of conduct falls within the ambit of this criminal offense.

In our final post on this topic, we'll attempt to tie all of this information together by providing a hypothetical example of what a money-laundering operation might look like and, of course, by examining the penalties for a conviction.

In order to illustrate how a money laundering operation might work, consider an individual who is generating a considerable profit by selling counterfeit goods, and running out of ways to spend the money or conceal it without drawing attention.

This individual might create what is known as a shell company, meaning an incorporated business entity that does not actually perform significant operations and/or owns few significant assets.

Here, the chosen entity would likely be one in which customers routinely pay in cash, meaning relatively few records and, by extension, a more limited ability on the part of law enforcement agencies to track any ill-gotten gains. Beauty parlors, nail salons and plumbing outfits are just a few examples of entities that have been -- and continue to be -- used for shell companies.

Once the theoretical individual selects the shell company, say a beauty parlor, they will gradually deposit the money from counterfeit goods into the beauty parlor, which, in turn, deposits it into its coffers and creates false invoices/receipts to conceal its origin. From there, the beauty parlor could then return the money to the individual or repeat the same process with other shell companies to create more separation and more difficulty tracing the funds.

While this is just one way in which a money laundering operation could take shape, it's important to understand that federal law enforcement has seemingly endless resources at its disposal, as well as considerable experience dismantling these sorts of criminal enterprises.

Furthermore, federal law outlines some incredibly harsh penalties for money laundering, with a conviction resulting in up to 20 years in prison, and a fine of up to $500,000 or twice the value of the funds involved, whichever is greater.

Here's hoping the foregoing discussion has proved insightful. As always, if you are under investigation by federal officials for money laundering or any other white collar crime, it's imperative to consider speaking with a skilled legal professional as soon as possible.

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Darryl A. Goldberg
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