Taking something less than legal and turning it into something squeaky clean sounds like a plotline from The Godfather or The Sopranos. While it’s easy to associate money laundering with lifelong criminal activity and highly organized crime syndicates, doing so would be a mistake.
Money laundering is as prolific among white collar workers as it is on the streets. So let’s take a look at the finer points of money laundering as a white collar crime.
What Is Money Laundering?
Money laundering refers to the process of taking “dirty” money from illegal activities and making it look like it comes from legal sources. Unfortunately, even with significant deterrents in place, money laundering remains a common illegal activity. After all, it’s not smart to operate with large amounts of illegal cash, right?
Traditionally, money laundering requires a three-step process.
- Placement involves moving the illegal funds into the financial system.
- Layering means covering up where you got the money. It usually involves multiple transactions and some shrewd bookkeeping work.
- Integration is the point where you withdraw the money from the financial system to use it for whatever you have in mind.
As you can see, it’s a process that involves several layers and a detailed plan for routing the funds. So though some money laundering schemes can be pretty straightforward, they still involve several steps and a reliable network.
Additionally, criminals crafted several variants over the years to make them harder to detect. For example, some break up the “dirty” money deposits across several accounts, others use wire transfers, and some simply smuggle the money across the border to deposit in foreign accounts—the advent of online banking and cryptocurrency only complicates matters.
Why Is Money Laundering Considered a White Collar Crime?
When you think of money laundering, famous mobsters from history may come to mind. As a notorious gangster, Al Capone remains one of the most famous money launderers of all time. That said, many high-profile businessmen over the years have been found guilty of the same crime.
One of the main reasons money laundering classifies as a white-collar crime is its non-violent nature. Though some people who carry out money laundering also commit violent crimes, money laundering doesn’t typically result in physical injury or death.
Starting in 1970 with the Banking Secrecy Act, the United States crafted significant legislation in place to combat money laundering. The Banking Secrecy Act required financial institutions to notify the Department of the Treasury of suspicious activity.
Interestingly, money laundering wasn’t technically illegal until 1986, when the government passed the Money Laundering Control Act. Those efforts expanded with the USA Patriot Act in the fallout of 9/11.
Examples of Money Laundering
There are hundreds of examples of money laundering cases, and it’s often the plotline for television shows and movies like The Laundromat. Take a look at some of the most famous money laundering schemes of all time.
Before the 2008 financial crisis, Wachovia Bank was a financial powerhouse in the United States. However, the financial crisis isn’t the only reason Wachovia Bank now belongs to Wells Fargo. The bank laundered money for drug cartels for several years.
Everything went sideways for Wachovia Bank in 2006 when a massive drug bust tied the bank to Mexican Casas de Cambio (known as CDCs). The bust led to a paper trail that kicked off an almost two-year investigation into Wachovia Bank’s dealings in Mexico.
Throw in a whistleblower, loads of traveler’s checks, wire transfers, and cash shipments, and the government built a solid case against the bank. As a result, Wachovia bank incurred fines, though meager compared to the institution’s worth.
The former campaign manager and businessman landed in hot water with multiple fraud charges and accusations of laundering millions in Russian money. Supposedly, Manafort and an associate manipulated financial documents to hide several million dollars from accountants and tax preparers.
Notably, Manafort hasn’t been convicted of money laundering yet, but he was found guilty on several fraud charges.
How a Lawyer Can Help
Facing money laundering charges isn’t easy or something to dismiss. It’s a charge that carries steep fines and prison time, especially if you don’t know how to build a proper defense. Though there’s no way to guarantee a victory in these cases, hiring an experienced legal team can help you get the best possible outcome.
The team at Zoukis Consulting Group can help you navigate the complexities of money laundering accusations. In addition, the team of experienced consultants can answer your questions and help you through every step of the process.
Zoukis Consulting Group is ready, willing, and able to defend you in court. Contact us today.
Published Feb 15, 2022 by Christopher Zoukis, JD, MBA | Last Updated by Christopher Zoukis, JD, MBA on Mar 16, 2022 at 8:36 pm