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UPDATED: Oct 10, 2012
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Money laundering, the metaphorical “cleaning of money,” is the practice of engaging in specific financial transactions in order to conceal the identity, source, and/or destination of illegally procured money and is a main operation of underground economy. The goal is to make the ill-gotten funds appear legitimate in order to allow criminals to enjoy the proceeds of their crimes.
Federal law containing the legal authority to prosecute money laundering cases is found in Title 18 of the U.S. Code, Section 1956.
In the past, the term was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting.
As a result, the illegal activity of money laundering is now recognized as potentially practiced by individuals, small and large businesses, corrupt officials, members of organized crime (such as drug dealers or the Mafia), cults, and even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.
The International Monetary Fund (IMF) estimates money laundering, the process drug traffickers use to introduce the proceeds gained through the sale or distribution of controlled substances into the legitimate financial market, to amount to between 2 and 5 percent of the world’s Gross Domestic Product, about $600 billion annually.
Under federal law, an individual convicted of money laundering can be sentenced to a fine of no more than $500,000, or twice the value of the property involved in the transaction, whichever is greater. They may also be sentenced to no more than 20 years in prison.
If you are under investigation for money laundering, consult with an experienced criminal defense attorney right away to preserve your rights.