Money Laundering: Charges, Penalties & Defense

Money laundering defense attorney - David J. Kramer

Are you being investigated for money laundering?

As an example, you have probably heard or read about the scandal involving a man named Rick Singer. Singer and wealthy parents, among them some famous actors and actresses, employed various illegal means of getting their children enrolled in prestigious colleges.

Actress Lori Laughlin and her husband, fashion designer Mossimo Giannulli, have more recently been in the news as media has covered their indictment proceedings in Boston. They have been indicted for, among other things, money laundering.  

The money laundering charge stems from the fact that this couple paid Mr. Singer for his help in the college admission schemes. They did this by donating to his supposed charity and funneling money through his corporation. They also brought funds in from outside of the United States for this purpose.

A Crime Connected To Other Crime

The indictments of Ms. Laughlin and her husband are not representative of most money laundering that goes on today.

According to Investopedia, money laundering can be done very easily online. In addition, the anti-money-laundering laws are slow to catch up because they are all based on the detection of stolen or “dirty” money as it passes through banks and banking institutions.

All money laundering happens because criminals need a way to make large amounts of money that have been generated through illegal activity appear as a legitimate source of income.

The following illegal activities could include:

  • Drug trafficking
  • Human trafficking
  • Terrorist Funding

Online Money Laundering

Additionally, here is a list of some of the ways criminals have found to launder money online:

  • Peer to peer transfers with mobile phones.
  • Proxy servers and anonymizing software – making an IP address almost impossible to detect.
  • Online auctions & sales.
  • Gambling websites.
  • Virtual gaming sites – real money is converted to gaming money and then back again into real money.
  • Cryptocurrencies like Bitcoin – which are increasingly being used in criminal enterprises because of the relative anonymity of its owners.

Organized Crime

The process of laundering money involves three steps:

  • Placement
  • Layering, and
  • Integration

A criminal organization needs to place dirty money into the system so it can be used. It does this by some of the methods discussed above and others I will list below.

It also needs to conceal where it came from through bookkeeping tricks or – as mentioned above – using a hidden IP address online.

Here are some more typical ways criminals have used to launder money:

  • Using a legitimate cash-based business as a front and inflating the daily total
  • Breaking up large amounts of cash into multiple small deposits in many accounts – called “smurfing” or “structuring.”
  • Currency exchanges
  • Wire transfer
  • Cash smugglers into other countries with less enforcement
  • Gems and gold
  • Investing in assets and selling them
  • Gambling
  • Counterfeiting
  • Shell companies

Penalties for Money Laundering

Money laundering has a close connection to other illegal activities and now terrorism, and the amounts of money represented are enormous (an estimated $2 trillion annually).

Therefore, many governments have increased their efforts to detect and combat money laundering. One of the ways they do this is by requiring banks to report suspicious activity.

There are several task forces, both in the United States and internationally, involved in detecting and prosecuting money launderers.

In the state of Michigan, money laundering penalties are arranged by degrees:

First-degree:

Felony. Penalty: up to 20 years in prison, and/or a fine of up to $500,000.00, or twice the value of the money laundered.

Second-degree:

Felony. Penalty: up to 10 years in prison, and/or a fine of up to $100,000.00, or twice the value of the money laundered.

Third-degree:

Felony. Penalty: up to 5 years in prison, and/or a fine of up to $50,000.00, or twice the value of the money laundered.

Fourth-degree:

High court misdemeanor. Penalty: up to 2 years imprisonment, and/or a fine up to $10,000.00, or twice the value of the proceeds. In Michigan, a high court misdemeanor is treated as a felony.

Criminal Defense Attorney for Money Laundering Charges

If you are being investigated or accused of money laundering, contact an experienced criminal defense attorney today. The penalties for being found guilty of this crime are potentially very severe.

Contact the The David J. Kramer Law Firm, PLLC today.

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