Money laundering is the act of taking proceeds from illegal acts and “cleaning it up” in order to hide its origin from authorities. This paper discusses the basic definition and three step process of money laundering, the history of the anti-money laundering movement, the agencies created to catch and prevent money laundering, and what consequences are in place for criminals involved. The origins of money laundering trace back thousands of years and the continuing crime eventually led to the passing of several statutes. The Bank Secrecy Act, the Money Laundering Control Act, and the Patriot Act are just a few of the major U.S. laws further discussed in this paper. The Financial Crimes Enforcement Network (FinCen) is the U.S. agency devoted
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The Patriot Act strengthened money laundering penalties by adding to the definition of money laundering and made it easier to prosecute those in violation; the legal system assigns civil and criminal penalties to those who violate anti-money laundering laws. For a court to hear a money laundering case, two characteristics must be proven. An individual has to attempt to conceal money from its original source and the original source must be an illegal activity to be considered money laundering. Theoharis (2015) explains the difference between spending money and concealing money. An individual can take illegal proceeds from selling drugs or robbing a store and spend it on other goods. This act is illegal but cannot be considered money laundering because the source of the money was not concealed. Another individual could run a business, collect revenue from his customers, and then conceal the profits from the government to escape taxation. This is not money laundering either because the profits did not come from an illegal source. Once it is established that the act is in fact money laundering, an individual could face fines, prison time, probation, or a combination of these if caught. Typically, prison time can be assigned 1 to a few years; repeat offenders or those in relation to terrorist activities can face up to 35 years. Fines have a wide range as well. Misdemeanors usually result in fines of a few thousand dollars, but federal convictions can assign fines up to $500,000 or double the amount laundered, whichever is greater. Lastly, probation can be awarded usually 1 to 3 years where the launderer will be watched closely by their assigned officer (Theoharis,
The Patriot Act strengthened money laundering penalties by adding to the definition of money laundering and made it easier to prosecute those in violation; the legal system assigns civil and criminal penalties to those who violate anti-money laundering laws. For a court to hear a money laundering case, two characteristics must be proven. An individual has to attempt to conceal money from its original source and the original source must be an illegal activity to be considered money laundering. Theoharis (2015) explains the difference between spending money and concealing money. An individual can take illegal proceeds from selling drugs or robbing a store and spend it on other goods. This act is illegal but cannot be considered money laundering because the source of the money was not concealed. Another individual could run a business, collect revenue from his customers, and then conceal the profits from the government to escape taxation. This is not money laundering either because the profits did not come from an illegal source. Once it is established that the act is in fact money laundering, an individual could face fines, prison time, probation, or a combination of these if caught. Typically, prison time can be assigned 1 to a few years; repeat offenders or those in relation to terrorist activities can face up to 35 years. Fines have a wide range as well. Misdemeanors usually result in fines of a few thousand dollars, but federal convictions can assign fines up to $500,000 or double the amount laundered, whichever is greater. Lastly, probation can be awarded usually 1 to 3 years where the launderer will be watched closely by their assigned officer (Theoharis,