What exactly is money laundering? When money is acquired through criminal activities, such as drug trafficking, prostitution, or theft, the money cannot be spent without raising suspicions. The authorities can track large sums of cash being deposited into financial institutions or being used to make large purchases. For this reason, money laundering became necessary. The primary goal of money laundering is to make dirty money appear clean.
How does money laundering work? Through "layering," the true source of the money can be hidden. There are three basic stages of money laundering: placement, layering, and integration. Placement, the first step, is the most dangerous stage of the process. The money has to be inserted into a bank account by cash deposits in order to start the layering process. However, banks are required to report unusually high deposits and so the case can be over before it even begins should this happen.
The second stage of the case is layering. By moving the money around, any authority who is investigating the case may meet with confusion. Even if the money is traced back several steps, it will still appear to be legitimate. Layering could include offshore bank accounts, business investments, U.S. accounts, European accounts, purchases of luxury items, wire transfers, and more. By going through all of this work, the source of the money has been made extremely difficult to trace.
The last stage of the case is integration. Once the work of layering has been completed, it can re-enter the U.S. economy through an investment or large purchase. When the process has made it all the way to stage three, it is extremely difficult to trace as there is no record of the previous steps. For more information, please click here to read about money laundering and the California Penal Code. If you have been accused of this crime, please do not hesitate to contact our team for representation.