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Explaining money laundering

On Behalf of | Dec 5, 2022 | White Collar Crimes |

There are numerous ways to make money illegally in Louisiana, but money coming from illegal means has a drawback. It’s difficult to spend large amounts of it without running afoul of the government. Making large purchases – like a house or a car – without a visible source of income is quite difficult.

This is where money laundering enters the picture. Money laundering is the process of making money made through illegal means appear to have a legitimate source. Through money laundering, the “dirty” money goes through a “laundering” process and becomes “clean”. Money laundering, like many white collar crimes, is a felony offense.

The basics of money laundering

All forms of money laundering begin with money derived from some criminal or illegitimate source. Often times, it’s illegal drug sales. But terrorist funding, illicit gambling and other types of underground activity can generate illegal money.

This is where money laundering splits off into a myriad of techniques for “cleaning” the money.

One of the classic forms of money laundering has been to use a legitimate-seeming business that deals heavily with cash, such as a restaurant. The illegal money can be integrated into the daily receipts, at which point the government would recognize it as valid money.

Other traditional forms of money laundering include:

  • Gambling at casinos and then reporting winnings as legitimate
  • Buying gold and other precious commodities and then taking them to other juristictions
  • Using fake corporations that only exist on paper

The advent of the internet and especially cryptocurrency has given another avenue to money launderers. The biggest advantage to using online forms for money laundering is that anti-money laundering laws frequently lag behind when it comes to cutting-edge technology. Criminals can exploit the gray areas to launder money in that way.

Money laundering happens is a variety of ways, but the easiest way to identify it is from the source. It will always involve some illegal source of money, and the end result is to make that dirty money seem like it came from somewhere clean.