What Exactly is Money Laundering?
Money laundering is a process used to conceal and convert money earned through illegal activities so that it ends up appearing legitimate. The process itself is technically considered a white collar crime, but the money could have been earned through any number of criminal activities, including drug distribution and embezzlement.
The process is referred to as “laundering” because it essentially takes “dirty” money and makes it “clean” for the offender’s use. Money laundering has three distinct phases:
- Placement: In this stage, the money to be laundered is removed from the illegal activity so it’s not detected, and then deposited in a legitimate business, such as a brokerage account or bank. From there, the cash may then be converted into traveler’s checks or money orders.
- Layering: In this stage, the money is transferred to a variety of different locations so the original source is ultimately untraceable by law enforcement. The cash could be moved around to different banks or accounts, or could be put into new businesses or trusts. It might even be sent to different states or countries.
- Integration: This final stage of laundering involves putting the money back into the economy. The money has now been “cleaned,” so it can freely be used to buy legitimate services or property because the criminal appears to have earned the money through legal activities. Once the money has reached this stage, it is extremely difficult for law enforcement to track its source.
For more information on money laundering charges and how to defend yourself when accused, consult experienced criminal defense lawyer David R. Eshelman.