Federal officials may file money laundering charges against individuals alleged to have used funds generated by illicit activities. According to Whistleblowers.org, allegations may include disguising the source of funds.
A conviction requires evidence an individual carried out three specific steps. Without also showing funds came from unlawful activity, a jury may not have enough proof to convict.
The three steps of money laundering
The first step is “placement.” This generally involves depositing proceeds generated by an illegal act into a U.S. bank account. The second step of “layering” consists of mixing those proceeds in the account with other funds deposited from a legitimate source.
Individuals may also engage in layering actions by wiring the funds to another account. The final step of “integration” reflects introducing the money back into the economy. This may include purchasing real estate or other assets.
Certain transactions may raise allegations
The U.S. Department of Justice notes that prosecutors must prove a defendant completed a transaction knowing the money came from an unlawful act. Sources of unlawful funds may include proceeds allegedly obtained through fraud or tax law violations.
Prosecutors may then attempt to show that certain bank deposits and withdrawals qualify as the three steps that prove money laundering. Wire transfers, currency exchanges and online payment apps may also serve as purported evidence of an allegedly illicit transaction.
Changes made to federal financial regulations may cause governments and artificial intelligence to flag certain deposits. They may appear to reflect “suspicious” or “unusual” activity. If officials allege an individual engaged in money laundering, however, he or she has a right to defend against and counter a prosecutor’s evidence.