Criminals often want to make it look like they are earning money through a legitimate business. They conceal the actual source of their money and keep investing it in their own legal business to turn their money white. The term associated with money laundering is racketeering, which describes organized crime, drug trafficking or any other criminal activity that is a source of black money.
The motive behind money laundering is to hide the actual source of money because it is generated through illegal activities. Money is cleaned by channeling it through different sources, so banks will accept it without suspicion. Shell companies are disguised as businesses that look legitimate but engage in illegal activities. These companies are used to generate false receipts and invoices to document the illegal money. Larger money laundering schemes might involve several fake U.S. and offshore bank accounts. The money is usually divided and transferred into these accounts, making it difficult for law enforcement agencies to trace it back to the source. The IRS is one of the key agencies involved in money laundering investigations. Law enforcement agencies usually attempt to follow the money trail and find loopholes.
The Money Laundering Control Act of 1986 officially made money laundering a Federal crime. It prohibited any financial transaction involving money that was generated through certain criminal activities. These activities include racketeering, drug trafficking, white collar crimes, human trafficking, murder or any other violent crimes. The person charged must have prior knowledge that the money was generated through illegal means. All state laws must abide by the Federal Money Laundering Statute, and the only difference is the definition of crimes to which this law may be applicable.
Being accused of money laundering may land you in a very difficult position. It is important to contact an attorney as soon as possible. Turning to an experienced attorney might just give you an edge and get you off the hook.