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Understanding money laundering

On Behalf of | Oct 6, 2022 | Federal Crimes |

Money laundering in Iowa is any of a number of techniques that hide the source of money, usually to conceal the fact that the money was acquired through criminal activity. Money laundering itself is a crime, and it is often charged alongside other crimes.

What money laundering does

When someone earns money through doing a crime, such as selling drugs, it can be difficult to explain where the money came from. If the amount of money is large enough, it needs to be declared on tax forms somehow, and it needs to appear as though it came from a legal source. Otherwise, spending the money will attract attention from law enforcement. Money laundering makes the money from criminal activity seem to originate from a legal source. A classic example is taking a large amount of cash and depositing it into bank accounts slowly, over time, so that it does not attract suspicion. This may require the help of several people physically carrying cash to various banks.

Modern money laundering

Today, cryptocurrency has simplified much of the work of money laundering. Criminals can buy crypto with their illegally-sourced money, pass it through lots of exchanges and transactions to make it hard to trace, and then hold onto the final crypto accounts and withdraw them as needed. Crypto is harder to monitor than money in bank accounts. Crypto has played a major role in covering up and enabling financial crimes.

Money laundering happens when criminals want to hide how they got their money. It is a crime that is often difficult to prove if the criminal has done some research and uses a sophisticated approach.



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