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Different Types of Money Laundering Schemes

Different Types of Money Laundering Schemes

Money laundering refers to the process undertaken to “clean” dirty money (i.e. money obtained via criminal activity). Many money laundering schemes are connected with drug offenses, embezzlement (and other white-collar crimes), and terrorist-related offenses.

Common Money Laundering Schemes

Money laundering is a white-collar crime that is charged as a federal offense under 18 U.S.C. § 1956(a), which is punishable by up to 20 years in prison and a fine of up to $250,000. Common money laundering schemes are:

  • Bank laundering. If a person owns a financial institution (i.e. a bank, loan company, credit card company, etc.), they can easily clean money by moving the money throughout their organization to another financial institution. In most cases, it is hard to flag or detect money laundering because they take place using currency exchanges.
  • Cash business laundering. Cash businesses like laundromats, vending machines, restaurants, lawn services, car washes, and street vendors are often used to launder money. Because of the large amounts of cash flowing into the business already, it is harder to prove that dirty money is being cleaned with these businesses. While law enforcement officers can compare a business’s profits and cash flow to similar businesses, it can still be difficult to prove that money is being laundered through the business.
  • Casino laundering. A lot of money exchanges hands at casinos, which is why money laundering schemes are often run through casinos. In most cases, people launder money through casinos by purchasing chips, gambling very small amounts, and then cashing out to clean the dirty money.
  • Layering. This type of money laundering occurs when dirty money is put through many transfers and transactions. The goal of the purchases is to “distance” the money from its illegal origins. For example, dirty money will first be exchanged for gold currency then used in a real estate transaction, and then for casino chips. In layering schemes, dirty money typically goes through multiple countries as well.
  • Real-estate laundering. In these types of money laundering schemes, dirty money is used to make a cash purchase on a piece of land or property, which is quickly sold after the initial sale. The resale money is then deposited and considered clean money.
  • Structuring. Structuring occurs when large cash amounts are split into smaller amounts and deposited into a lot of different accounts using cashier’s checks or money orders. This form of money laundering is also known as smurfing.
  • Trade-based laundering. Dirty money is cleaned when criminal funds are disguised and moved through trade transactions, which can include falsely invoicing good or services, creating multiple invoices for singular transactions, and/or falsely listing the sale of goods or services.

Get Legal Help

At Brickfield & Donahue, our attorneys have over five decades of collective experience, and we are equipped to handle white-collar crime and federal cases, including money laundering cases. Known for our commitment to excellence and dedication to our clients, we can work tirelessly to help you protect your reputation and freedoms. We understand how challenging it can be to be under investigation or charged with a crime, which is why we are committed to supporting our clients throughout the entire legal process.

Let us help you build a solid defense strategy. Schedule a free case consultation today via phone 201-574-7919 or online.

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