Did you know that you can be a part of a money laundering scheme unwittingly? You may ask “How does a person become involved in money laundering and not even know it?” It happens all the time and it is very bad news for the person who is brought into the scheme unaware.
Money laundering is a serious offense and someone who gets involved, even if he/she doesn’t realize it, is subject to federal criminal charges. Sandman, Finn, and Fitzhugh attorneys at law are criminal defense lawyers who have experience in representing unwitting accomplices in money laundering cases. In this article, we shed some light on exactly what money laundering is, how you may get involved accidentally, and what you can do to protect yourself when it happens.
What Is Money Laundering?
If you’ve ever watched the Netflix hit show “Ozark,” you have seen money laundering in action. One of the main characters, Marty, launders money from a Mexican drug cartel. It gets very messy but is an extremely entertaining show. In this case, however, Marty knows what he is doing; he is not an unwitting participant.
The Oxford dictionary defines money laundering as ”the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.” Money laundering is a federal crime that involves disguising financial assets so they can be used without detection of the illegal activity that produced them. In this way, the criminal transforms the monetary proceeds derived from criminal activity into funds with an apparently legal source.
The federal crime involves obtaining “dirty” currency earned from illegal activity (such as drugs, firearms, or sex crimes) and “cleaning” the money. Then, this “cleaned” money is deposited into legally sanctioned banking institutions.
Types of Money Laundering
There are several types of money laundering:
Structuring, also called “smurfing,” is when the total amount of dirty money is broken into smaller, less suspicious amounts. Often someone will purchase money orders or cashier’s checks in order to avoid suspicion from the bank. Although money orders and cashier’s checks are completely legal, depositing a large number of them with the same total looks dubious.
Trade-based laundering is similar to embezzlement in that it typically involves altering invoices or business documents to disguise dirty money as business profits. In this way, the money has a paper trail, so the bank doesn’t suspect the profits as “dirty.” However, if your business documents show an unexplainable and significant profit increase, the bank may see it as a red flag and investigate further.
Let’s say you have a strip club, car wash, or another cash-heavy business, and you deposit a large amount of cash. The bank has no inkling as to whether the cash is dirty or not. Since there is no easy way to prove the legality or illegality of your profits, just the fact of owning a cash-heavy business can falsely incriminate you of money laundering.
Gambling winnings are completely legal and usually received in cash. By purchasing chips with dirty funds, gambling a small amount, and turning the total chips back in for cash, a person can claim all of the money as gambling winnings in theory. As a result, banks are often suspicious of these winnings and may suspect you of money laundering.
Real Estate Laundering
Real estate can be an opportunity for someone to launder money. Theoretically, a person can purchase a piece of real estate property with cash and then quickly sell it. Any profits associated with the sale are completely legal. Although a legitimate business tactic, the increased use of property flipping for money-laundering purposes can make the action seem suspicious.
Unwittingly Caught In a Money Laundering Scheme
One of the significant elements of many professional money laundering schemes is the use of money mules. Money mules are people who are used to transfer value by either laundering stolen money or physically transporting goods or other merchandise. Sometimes the mule is knowing and willing but sometimes he/she is unwitting. A sizeable amount of money mule transactions are linked to online illicit stores and cybercrime such as phishing, malware attacks, credit card fraud, business email compromise and other types of scams, including dating sites, lottery, and employment scams.
So, how can an ordinary individual get brought into a money laundering scheme and be totally unaware of their participation? Unwitting mules are used by Organised Crime Groups to cash counterfeit checks and money orders or purchase merchandise using stolen credit card numbers or other personal identification information.
In some cases, the mule may suspect that the source of the money they are moving is not legitimate. The mule can be promised a fee or commission for moving the money. When a willful, yet blind, money mule uses the income to supplement their regular income because of financial difficulty or greed, he/she is also guilty of the federal crime.
The organizations and hierarchy of professional money laundering can be very complex and the networks can be difficult to trace. Funds can be moved through a complex chain of accounts established by domestic shell companies and fictitious contracts.
Ways a Money Mule Can Be Contacted and Duped
Criminals often target persons who are looking for additional income, looking for work, and people on dating sites. That being said, anyone can be approached to be a money mule.
Here are some of the ways you can be contacted and duped into becoming a money mule:
Work-from-Home Job Opportunities
- You receive an unsolicited email or social media message that promises easy money for little or no effort.
- The “employer” you communicate with uses web-based email services such as Gmail, Yahoo, Hotmail, Outlook, etc.)
- The “employer” asks you to open a bank account in your name or in the name of a company you form to receive and transfer money.
- As an “employee,” you are asked to receive funds in your bank or brokerage account and then transfer the funds through wire transfer, ACH, mail, or a money service business like Western Union or MoneyGram.
- You get to keep a portion of the money you transfer,
- There is no job description for your duties as “employee.”
Dating and Social Media Sites
More and more, dating and social media sites are being used to make contact with someone and get that person involved in a laundering scheme. One way is for an online contact or companion, who you have never met in person, to ask you to receive money and then to forward the funds to one or more individuals you do not know.
How You Can Protect Yourself
Here are some things you can do to protect yourself from becoming an unwitting accomplice in a money laundering scheme.
- Perform online searches to check the legitimacy of any company that offers you a job.
- Don’t accept any job offers that ask you to open a new bank or brokerage account and use it to transfer money.
- Be skeptical if an employer asks you to form a company to open a new bank account.
- Question when an individual you meet on a dating website wants to use your bank account for receiving and forwarding money.
- Never give your financial details to someone you don’t know and trust, especially if you meet them online.
If You Are Convicted of Money Laundering
If you are coerced and duped into a money laundering scheme, an investigation uncovers your involvement, and you are arrested and charged with a federal offense, you need to contact a federal criminal defense lawyer immediately. You will need to start a strong defense through established techniques with the help of an experienced lawyer. The defense team may need to use a variety of strategies to prove to the courtroom that you, the defendant, are innocent of any wrongdoing. This can involve using an alibi, wrongful identification, false arrest, or documentation that can prove being duped unwittingly. An attorney who is knowledgeable of strategies to use may discredit the evidence, witness testimony, and refute any expert witness testimony.
Contact Our Attorneys If You are Accused in a Money Laundering Scheme
If you are charged with being an accomplice in a money laundering scheme, contact our Raleigh criminal lawyers immediately. We have both the knowledge and experience to advocate for you and defend you against federal charges. Schedule a free consultation by calling our law firm at 919-887-8040 or filling out our contact form to speak with an attorney. We are available 24 hours a day, 7 days a week.