If a friend asks us to start a business and he says that he has an investor to put up the start-up money for the start up but later down the road it turned out that the money was not obtained legally, could we be in trouble?

We don’t know who the invester is or where the money came from.

Asked on December 24, 2018 under Business Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

There's trouble and there's trouble:
At a minimum, if the money was not obtained legally, it could be recovered from your business and anything earned or obtained by your or your business could also be taken (you can't profit from illegal money)--you could lose what are working for. 
That's the minimum. If there is reason that you should have known or suspected that this money was illegal (e.g. a large cash investment without any explanation for its source), you could be considered to collaborated, assisted in, or conspired to commit money laundering and could face criminal charges. Do NOT accept investments if you have any qualms or concerns about their source.

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