Definition and processes for money laundering

On Behalf of | Nov 11, 2022 | White Collar Crimes

Generally speaking, money laundering in Florida is the crime of disguising the source of money to make it look like it came from legitimate, rather than illegal, activities. The name comes from the process of taking illegally-acquired money and laundering it to make it look clean. Most modern banks and financial institutions have policies in place to avoid taking money from illicit activities and so money laundering becomes necessary to use large amounts of money gained from criminal enterprises.

Money laundering process

The process of money laundering can be broken down into three steps: placement, layering and integration. Placement refers to the act of putting money into the system, perhaps by using a cash-based legitimate business owned by a criminal enterprise. Layering means concealing the true source of the funds by using multiple transactions or bookkeeping methods. Integration is bringing the money back without any ties to illegal activities and with a legitimate origin story.

Money laundering variants and related crimes

A simple form of money laundering is called smurfing or structuring. This involves depositing the ill-gotten funds into a bank account in small deposits so as to avoid raising any eyebrows. Money laundering and smurfing are separate white collar crimes in many jurisdictions. Other methods of money laundering include buying and selling commodities like gemstones and precious metals, gambling with illicit funds in casinos and using shell companies to hold and then redistribute funds.

Electronic money laundering

The rise and growth of the internet has created new ways to launder money. Money can be transferred between people and accounts with less risk of detection thanks to online banking, peer-to-peer money transfer services and anonymous online payment enterprises. Online auctions and sales sites, online gambling and cryptocurrency markets have also created new means to clean money from criminal activity. Money laundering is a serious white collar crime, and people discover new ways to do it all the time.