Laundering means to wash or clean something. Most of the time when people speak about laundering something, they mean physically cleaning an item. However, when it comes to money laundering, the word has a more metaphorical meaning.
While there probably are situations in which criminals may have to physically clean money, possibly to remove paint from security devices, blood or trace chemical evidence, money laundering charges have nothing to do with physically washing cash. Instead, they usually involve an individual or business trying to take money earned via criminal activities and legitimize it, often by moving the money through an intermediary business.
For example, an individual engaged in criminal enterprises may run a small bodega and report a large number of small cash purchases that never happen. While they have to pay tax on the income involved from such transactions, the funds effectively become legitimized, allowing for their easier use for major transactions or at least the potential to deposit them in the bank. There are several ways in which a business could wind up accused of money laundering.
The business owner or manager has ties to criminal activities
If law enforcement officers believe that someone involved in the operation or ownership of the business has a personal relationship with a known criminal or has engaged in criminal activities, the state may begin to scrutinize the business. They may potentially move to bring charges against the people they believe played a role in the money laundering.
Particularly when there are financial ties or frequent transactions between the business and a criminal organization, those transactions could seem suspicious to investigators.
The business has many customers who pay cash and have criminal ties
Sometimes, individuals could make an effort to launder money at a business by spending ill-gotten cash to purchase supplies for the business or possibly purchase financial products, like prepaid credit cards. If investigators can draw a connection between the business and illicit activity, they may try to bring charges even if they can’t prove that the business manager or owner benefited directly from the money laundering.
Investigators could connect traceable bills to the business
There are many ways that state and federal agencies try to track illegal operations. Using marked or traceable cash is sometimes part of this process. If a business has frequently deposited marked bills that investigators know initially went into the hands of a criminal organization, they may begin to suspect that the business plays a role in laundering the money earned through criminal activity.
Money laundering allegations often involve a lot of paperwork and financial evidence. The careful review of that evidence and planning a defense strategy early can help those facing this serious white-collar crime protect themselves.