Money laundering has a long history as being a white-collar crime connected to various types of illegal activities such as the drug or sex trade, and any activities involving cross-border smuggling. In South Florida, we have heard many stories throughout our history of illegal drug money being laundered through legitimate businesses in the area. But what exactly does it mean to launder money? And what are the implications of a crime like money laundering?
As technology changes, crimes also change. Money laundering is not immune to the changing face of how we do business with regards to the creation of alternative currencies that can be processed without going through historically recognized financial institutions such as banks and credit card companies. As virtual currencies such as Bitcoin change the way that cross-border business is processed, they may also change the way that money laundering is viewed in the eyes of the law.
What is money-laundering?
Money laundering involves the intricate concealment of illegally obtained funds. Usually those who are laundering money spend a lot of energy disguising the origins of the money, and work hard at making subsequent financial transactions with the illegal funds seem as legitimate as possible by "hiding" the money in "front" businesses, or by spreading out the funds through international transactions and accounts.
Money laundering criminals usually follow a three-step approach of distancing themselves from the "dirty" money by activities such as gambling, currency exchange or smuggling, blending funds in legally-owned businesses, or a loan replacement. The criminals then focus on the "structuring" of the funds by spreading them out amongst various accounts or across borders. Finally, the money will be returned to the launders after it has been processed through different financial institutions. The last step of receiving the money usually happens through something like a large investment purchase.
How is it prosecuted and what are potential consequences for conviction?
Money laundering is a felony in the state of Florida. Depending on the amount of money involved in the transactions over a 12-month period, the charge for money laundering ranges from a third-degree to a first-degree felony. A prosecutor in these types of cases must prove two things during trial. He/she must prove that the defendant knew about the underlying criminal activity that led to obtaining the funds, and that the defendant knew of the intended use of the financial transactions to protect the illegal funds. Penalties for a money laundering conviction are also dependent on the amount of money exchanged, but can range anywhere from up to five years to up to 30 years in prison, in addition to significant fines.
What about Bitcoin?
Since the inception of virtual currencies such as Bitcoin, there has been a concern by law enforcement about use on the black market and in concealment of illegal activities, due to the often-anonymous nature of the exchange of this currency. The U.S. has struggled to figure out exactly how laws apply to Bitcoin because there are many legitimate businesses that do accept it. To better combat the vague nature of Bitcoin crimes, Florida lawmakers are proposing a bill that would include "virtual currencies" in the state's money laundering statute. This would mean that those involved in the transfer and concealment or use of Bitcoin obtained illegally could be prosecuted as money launderers. If the law passes to include Bitcoin as a currency that can be considered laundered, prosecutors will still need to prove the intent of the defendant to conceal the dirty currency through various types of transactions in the same way that they prosecute money laundering with traditional currencies.
If you have been accused of a white-collar crime such as money laundering, especially when the law is vague such as with Bitcoin, it's important to contact an experienced criminal defense attorney who can help you understand the charges filed against you. In an area of criminal law that is constantly changing and being updated as technology changes, your attorney will be able to give you the latest information on how the laws are structured and how they apply to your case.
Florida Money Laundering Laws. (n.d.). Retrieved April 25, 2017, from http://statelaws.findlaw.com/florida-law/florida-money-laundering-laws.html
[email protected], D. (n.d.). Criminals who use Bitcoin targeted under proposed Florida law. Retrieved April 25, 2017, from http://www.miamiherald.com/news/local/community/miami-dade/article146087044.html
(n.d.). Retrieved April 25, 2017, from https://www.moneylaundering.ca/public/law/3_stages_ML.php