Quesada Law Firm
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What is money laundering?

As we’ve seen in the news recently, many pollical officials have been charged and sent to jail for money laundering. But what exactly is money laundering?

When laundering money, criminals are disguising money from an illegal source (like drug money) to make it seem like it came from a legal source (like business revenue). They hide the money because if it was detected that it had come from an illegal source, the money could be seized by officials and in turn, connect those individuals back to illegal activity.

Typically, criminals laundering money are drug traffickers, embezzlers, mobsters, terrorists, con artists or corrupt politicians. Drug traffickers, in particular, use a great deal of cash and therefore frequently launder money, as cash can be conspicuous and give them away.

 

Three parts to money laundering

There are three steps in the process of laundering money: 

1. Placement

Placement is when criminals deposit the money in banks or financial institutions in ways that avoid detection or red flags by financial institutions, like in small deposits or by different people. This is the easiest stage of the process to be caught.

2. Layering

Layering is shifting money through multiple banks and transactions. Wire transfers, transferring money to different names and accounts, transferring the money to different currencies or countries and purchasing high-value items are all ways to move money. Moving money around makes it hard for officials to trace and follow. The layering system is complicated for a reason – the harder it is to track money, the harder it is to be caught and detected.

3. Integration

Integration is incorporating the dirty money back into the mainstream financial system through seemingly legitimate forms. This money appears to be legal and at this stage of the game, the criminal can use the money without getting caught. The dirty money is mingled with clean money and becomes difficult to distinguish.

 

Many law enforcement agencies investigate money laundering – the Department of Justice (DOJ), the Internal Revenue Service (IRS), the Drug Enforcement Agency (DEA), the State Department and the Federal Bureau of Investigation (FBI) all have departments that continually examine money laundering activity.

Money laundering has broad effects. Worldwide, it’s estimated that criminals launder two trillion dollars annually and unfortunately, successful money laundering leads to more drug traffic, more crime and more violence in our communities. 

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Quesada Law Firm
1200 Brickell Ave
Suite 1950
Miami, FL 33131

Phone: 305-330-1833
Fax: 1-305-397-1318
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