Money Laundering is a Crime … but for some, it is also an Occupation
Most money laundering charges have to do with the criminals routinely transacting their criminal proceeds which in its simplest form is: Anyone who “knowingly” uses or attempts to use the proceeds of “specified unlawful activity” in a “financial transaction” with intent to “promote the carrying on of specified unlawful activity” or “to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity” has violated Title 18 USC Section 1956 of the U.S. Code.
For some though, money laundering is offered to criminal organizations as a service for a fee. Money Laundering as a Service (“MLaaS”) as it were. I have been involved in numerous investigations of such organizations.
Some, are components of large, criminal organizations such as drug cartels that specialize in laundering criminal proceeds and getting the proceeds back to the cartel bosses.
Others are independent enterprises that use various techniques to accept large amounts of fiat currency that has been generated by criminal activity, place it into the economy such as intermingling it with the legitimate business receipts of cash intensive business like restaurants, movie theaters or grocery stores and then issue checks, ACH or wire payments as though they are legitimate business remittances. These payments may be the first of several “layering” transactions intended to conceal the money’s origins. Once the layering is complete, the “head of the snake” now has access to his or her money since it has been assimilated and is indistinguishable from money earned through legitimate means.
Organizations that offer money laundering services are often diverse and may include import / export businesses, trucking companies, real estate companies, air freight, insurance brokerages, mortgage brokers, money services businesses and retail banking. Outwardly, they look like any ordinary business. The only observable difference is that they accept cash in much larger proportions than their legitimate peers. Provided they don’t act like the criminal mastermind Hushpuppi and post pictures of their lavish lifestyles on social media. These businesses may also be transacting with other businesses with which you wouldn’t expect them to be. In money laundering transaction monitoring terminology, these are “transactions without an apparent commercial purpose”. These aberrant transactional relationships coupled with unexpectedly high revenues and a disproportionately high amount of cash receipts are one of the ways banks are expected to detect when their customers and involved in suspicious activity.