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money laundering

Understanding Money Laundering: Definition, Stages and Methods

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Money laundering is a serious offense that carries hefty consequences. It’s important to know the law so you can ensure that you don’t break it inadvertently. If you’ve been charged with money laundering or are being questioned by the police, you should contact an experienced criminal defense attorney right away.

What is Money Laundering?

Under Texas law, money laundering is defined as knowingly having an interest in concealing, transferring, transporting, or facilitating a financial transaction in any way that involves the proceeds of criminal activity. Criminal activity is any transaction that knowingly comes from any activity that is considered to be a felony.

It can also be considered money laundering if one were to invest, receive, or spend proceeds that were used or funded by criminal activity. Simply put, money laundering is typically a way for criminal enterprises to make money illegally and then “clean” it so that they can use the funds legally without anyone knowing about its criminal origins.

Stages of Money Laundering

According to Texas law, money laundering usually involves the three following steps:

Step One: Placement

Placement refers to moving cash from its original criminal source. Money laundering is a way for criminal enterprises to move their cash and “clean” it so that they can use the funds for other legal purposes, so they must place the cash into legitimate sources.

Examples of placement include depositing money into banks, transporting money across borders to deposit it somewhere out of the country, or purchasing items that can then be resold for cash.

Step Two: Layering

Layering is the process of trying to cover up or conceal the fact that the money was moved. The purpose of this is to make it difficult for anyone to know that the money was laundered and to hide its origins.

Step Three: Integration

The final stage of money laundering is known as integration. In this stage, the laundered (moved) money is put back into the economy, and the criminal enterprise is able to use the money without anyone knowing that it came from criminal origins.

Methods

There are several methods for cleaning or laundering money. Some examples include the following:

Create a Shell Company

One common way that criminal enterprises launder money is by creating a shell company. A shell company is a fake company that is presented as a legitimate business, but it doesn’t actually sell anything or perform any services. However, its paperwork would be created as if the company were real.

There would be articles of incorporation or documents forming a legitimate LLC, for instance. The purpose of a shell company is to make it seem that money that is being obtained illegally is actually coming from this legitimate business.

Smurfing

Another common way to launder money is referred to as smurfing or structuring. This entails dividing up large amounts of cash into smaller amounts in order to deposit funds into one bank or several banks so that they can evade triggering an audit and alerting the authorities.

If an individual deposits a significant amount of cash into their account, it must be documented with the IRS, and it could raise red flags. By splitting the funds up, less attention is drawn, and there may be no reason for law enforcement to ever look into where the money is truly coming from.

Vinas & Graham, PLLC Is Here to Help

If you or a loved one is arrested for money laundering or you are being questioned by the police, it’s important to speak with a lawyer right away. Speaking to the authorities without legal representation by your side can often create the possibility for self-incrimination, as everything you do and say can typically be used against you if you haven’t invoked your right to remain silent or requested an attorney.

When you hire a lawyer, it’s important that you hire a firm that is truly dedicated to helping you. Vinas & Graham, PLLC, are the lawyers that you need. Both Attorney Vinas and Attorney Graham understand the laws regarding federal crimes. Both attorneys were former Felony Chief Prosecutors, which provides them with the unique perspective and abilities to see cases from both sides. This allows them to raise a defense that is more likely to be successful.

Call the law firm of Vinas & Graham today at 713-229-9992 for a private and confidential consultation or fill out the online contact form for a callback. You can also follow us on Facebook to learn more about our firm and everything that we do to help our clients.

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