Some activities that may lead to a money laundering charge

November 30, 2020
Some activities that may lead to a money laundering charge

Business owners may find themselves facing allegations of money laundering in a variety of ways, such as by hiring undocumented workers. According to the American Bar Association, the U.S. government may view hiring employees to work “off the books” as a means of employment tax evasion and possible money laundering. 

The way that a business owner uses the proceeds from funds that should have gone to pay taxes may raise suspicions of money laundering and lead to charges. For example, the saved funds may transfer to an offshore financial account. They may next commingle with money that leads to suspicion of an illicit purpose. 

Illicit funds may appear as legitimate business revenue

Money laundering charges require evidence of actions intended to conceal the source of illicit revenue by making it appear as though it came from a legitimate business. An illegal source of income may, for example, come from trafficking humans, endangered animals or drugs. The funds acquired, however, may then mix in with income produced by a legal enterprise, such as a restaurant. 

Three steps prove a money laundering offense

As reported by, a conviction requires proof of an individual carrying out three steps to show involvement in money laundering. The first step, or “placement,” refers to depositing money from an illicit activity into a legitimate business account. While in the account, the second step, or “layering,” occurs, which mixes the illegal funds with income from a lawful operation. The final step, or “integration,” involves the withdrawal of commingled money and introducing it into the stream of commerce. 

Without substantial evidence of the three stages of money laundering, a prosecutor may not prove an individual violated the law. A judge and jury may first require proof beyond a reasonable doubt of a business owner’s intention and actions to launder illicit funds. 


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