MONEY LAUNDERING
Money laundering is the disguising the origin of money obtained from illegal activities. Essentially, it is taking dirty (illegally obtained money) and making it clean to be use for legitimate purposes. It is a crime that is codified by 18 U.S.C. 1956 and 1957.
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There are generally three main steps in the money laundering process; placement, layering, and integration.
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(1) Placement: Money obtained from illegal activity is deposited into a legitimate financial institution. This is the riskiest stage of the laundering process because large amounts of cash are pretty conspicuous, and banks are required to report all cash deposits over $10,000.00 (This is where the federal crime of structuring is generally seen) Individuals attempt to thwart the $10,000 reporting requirement by breaking the deposits up into smaller deposits.
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(2) layering: This involves sending money through various financial transactions to change its form and make it difficult to follow. Layering may consist of several bank-to-bank transfers; wire transfers between different accounts in different names in different countries; making deposits and withdrawals to continually vary the amount of money in the accounts; changing the money’s currency; and purchasing high-value items to change the form of the money.
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(3) Integration: At the integration stage, the money re-enters the mainstream economy in legitimate-looking form — it appears to come from a legal transaction.
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Charges of money laundering are often brought with drug trafficking or fraud cases. These statutes prohibits financial transactions and the transmission or transportation of funds derived from criminal activity, or undertaken for the purpose of evading taxes or avoiding financial reporting requirements and prohibits monetary transactions involving criminally derived money or property with a value greater than $10,000.
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Money Laundering as an Additional Charge
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A lot of times the government likes to add a money laundering charge into a variety of other charges such as drug trafficking and mail or wire fraud. This provides the government with greater leverage during the criminal case.
Money Laundering Penalties And The Federal Sentencing Guidelines
18 U.S.C. § 1956 money laundering offenses carry a potential maximum penalty of 20 years’ imprisonment and significant fines. 18 U.S.C. § 1957 offenses carry a penalty of up to 10 years, also with significant potential fines.
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Like most other financial crimes, the sentencing calculation for money laundering offenses are driven by the intended loss of the criminal enterprise. The specific laws and provisions under which an individual is convicted or pleads guilty will have an impact on the guidelines sentencing range.