You may have heard about money laundering on television but are not aware of the specifics regarding this activity. For instance, why does law enforcement take money laundering so seriously? A major reason is because money laundering often connects to very serious crimes.
Money laundering is the process of taking money derived from illegal activities and processing them through different businesses or institutions to disguise the criminal origins of the money. Basically, criminals “clean” the money so that by the time it arrives at its final destination, it is hard to determine where the money came from in the first place.
Crimes associated with money laundering
According to the FBI, a person may launder money because it comes from any number of criminal activities. A person may have acquired money from a complex financial crime or by fraud. General corruption may also be the main factor. Some money launderers accumulate wealth from different forms of private or public corruption schemes.
There are also criminals who launder money gained from particularly serious crimes. People who engage in human trafficking, drug running or terrorism know that the government is on the lookout for them, so they try to hide the origin of their proceeds in the hopes that law enforcement will not trace the money back to their activities.
Consequences of money laundering
The act of money laundering can do serious damage to sectors of the economy. A business implicated in money laundering, even if its employees are unaware of the activity, can lose the trust of the public. This can result in less productivity and possibly the ruination of the business. Money laundering can also erode the faith of people in public institutions.
Because money laundering involves the transfer of money between institutions, it is possible for innocent parties to become involved in a money laundering investigation. As with any criminal investigation, law enforcement should respect your rights when dealing with you.