What exactly is money laundering? How is money laundering different from embezzlement? These are just two questions someone might have when they find out they are under investigation for either of these serious crimes.
Because the federal government is likely to be involved, it’s important to understand what each of these offenses is and the potential penalties you could face if convicted.
What Is Money Laundering?
Money laundering is the illegal process of making it appear that a large sum of money generated through criminal activity actually came from a legitimate source. This is an offense that those involved in organized crime, such as drug trafficking or terrorism, often commit; however, anyone who “launders” illegally procured funds can be charged with or without a connection to organized crime.
It’s not just street criminals who are charged with money laundering, either. Considered to be a white-collar crime, those who are involved in otherwise legitimate businesses or politics are also often accused of laundering money.
Money laundering occurs in three steps:
- First, someone must introduce cash into the financial system by some means
- Second, a series of complex transactions are carried out to conceal the illegal source of the cash
- Third, the money is collected after undergoing the transactions that make it appear to have a legitimate source
Examples of money laundering can include the following:
- Smuggling cash from one location and depositing it into another jurisdiction, such as an offshore account.
- Breaking a large sum of money into smaller deposits to avoid the suspicion of money laundering
- Cash-only businesses, where money can almost seamlessly flow from illegal sources to seemingly legitimate ones
- Shell companies or business entities that only exist in name and for the purpose of concealing the transactions that launder money
What Are the Criminal Penalties for Money Laundering?
Money laundering is almost always charged as a felony, making it a serious criminal offense to go up against. Those who are prosecuted by the federal government can face up to 20 years in prison and fines of up to $500,000 or double the amount of money that was laundered, whichever is greater.
What Is Embezzlement?
Embezzlement is the crime of misappropriating or stealing money or property belonging to someone who entrusted it with the embezzler. In its simplest form, embezzlement can involve stealing cash from an employer’s cash register or “skimming from the top” after making a sale.
Here are some other simple examples of embezzlement:
- Charging more for a product and keeping the difference
- Depositing vendor checks into a personal account
- Padding an expense account
- Taking bribe or kickbacks
More complicated forms of embezzlement can involve the mishandling of financial assets and property held in trust. This occurs when money is stolen through a Ponzi scheme, selling someone’s property off the books and keeping the money, using another person’s Social Security check, etc.
What Are the Criminal Penalties for Embezzlement?
When someone is accused of embezzling assets worth $1,000 or more, they may be prosecuted by the federal government. If convicted, federal embezzlement can be punished with a maximum fine of $250,000 and more than 30 years in prison, depending upon the overall severity of the crime.
Were You Accused of a Financial Crime?
If you are being investigated for money laundering, embezzlement, or another kind of financial crime, you need experienced legal counsel to help you defend against your charges. Depending upon how severe the accusations against you are, you may be facing a significant prison sentence and fines that may be impossible to afford.
Learn more about how our attorneys at Brad Bailey Law can help you defend yourself against serious criminal charges. Request a consultation with us today when you call (617) 500-0252 or contact us online.