When someone earns money via illegal means, the income that they generate is technically illegitimate. Thus, they need to “clean” that money before spending it, or it may be traced back to their wrongdoing. This is where money laundering comes in.
Money laundering is the process of taking unlawful funds and giving those funds the appearance of being legitimate. The following are two common examples of money laundering.
Laundering through real estate
Real estate can be a source of money laundering. One tactic that is commonly used by a launderer is to purchase real estate via a shell company. By using a shell company, a launderer creates some distance between themself and the illegitimate funds. After some time has passed, the real estate can then be sold and the funds have the appearance of being legitimate.
Laundering through a cash business
While payments are increasingly becoming digital, many businesses still utilize cash transactions. A business that operates using cash can provide money launderers with an opportunity to turn illegitimate funds into seemingly legitimate funds. For example, restaurants, bars and other hospitality businesses often have a high cash intake. A launderer can take illicit cash proceeds and exaggerate the cash takings of the business. On the books, this will look like the restaurant may have just had an extremely busy week, when in fact, there were few cash paying customers.
Money laundering is a white collar crime that can potentially result in severe criminal penalties. If you are facing charges of this nature, seeking legal guidance is an important step. Remember, you are innocent until proven guilty beyond all reasonable doubt.