Proving the elements of money laundering

On Behalf of | Jan 23, 2020 | White Collar Crime

Many recent high-profile court cases have involved individuals accused of money laundering schemes. This financial crime gets its name from attempts to “clean” money gained by illegal means. 

As defined by, money laundering is creating the illusion that cash earned through illicit activities came from a legitimate business transaction. It generally involves using a financial institution to disguise money allegedly generated by an illegal enterprise. 

Proving cash came from illicit activities 

A money laundering conviction requires proof that an individual received cash obtained through illegal means and that he or she intended to disguise its actual source. An effective defense may counter the prosecutor’s allegations by showing that the cash came from a legitimate enterprise and that a defendant had no intention of camouflaging the true source of the funds. 

Steps required for money laundering 

To obtain a conviction for money laundering, the prosecution must prove the defendant engaged in three steps: 

  1. Placement. The defendant must have placed a large amount of illegally obtained cash into a financial institution. Federal law specifies how much cash an individual may deposit without raising suspicions of money laundering. Generally, a cash deposit of more than $10,000 may raise a red flag unless the bank has noted the customer owns a cash-rich business such as a restaurant. 
  2. Layering. After the alleged illicit cash has cleared in a bank account, the defendant must have engaged in deceptive accounting actions to make it appear as though the cash is part of his or her normal business transactions. A prosecutor may point to a series of wire transfers to several different companies in and out of the U.S. as evidence. 
  3. Integration. After purportedly illicit cash has processed through various transfers, the defendant must have then brought the funds back into the economy disguised as legal revenue. 

Regardless of the nature of the charges, an individual accused of money laundering has a legal right to a defense against allegations of wrongdoing. 

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