Taxes are the civil responsibility of both individuals and businesses. Entities that benefit from government infrastructure have to contribute to the development and maintenance of that infrastructure. Any money a person or business generates is subject to taxation, and typically only taxed income is useful for major purchases or business investments.
People who earn their money through illegal or unofficial means may have significant amounts of capital that they can not spend on anything major, like a business, house or vehicle. Money laundering is the practice of trying to make previously untaxed money generated through questionable or illegal methods look like standard, taxed revenue.
Money laundering makes it harder for law enforcement agencies to track criminal activity. Anyone implicated in a money-laundering scenario could face significant consequences. What are the typical penalties associated with money laundering?
Money laundering will send you to jail for years
Although money laundering is a financial crime, it does not involve the misappropriation of someone else’s resources or the avoidance of taxes. Typically, money laundering will involve paying tax on illicit funds to make them appear legitimate. The consequences for money laundering are therefore primarily criminal and not financial.
According to statistics that look at federal money laundering offenses between 2013 and 2017, the vast majority of those convicted face incarceration as a consequence. The United States Sentencing Commission reports that the average sentence for money laundering was 67 months. That means more than five years in state custody. However, when you consider that the sentencing guidelines for money laundering offenses averaged between 100 and 108 months, 67 months is actually lenient.
There are numerous defenses possible
Financial records aren’t just black and white. There is interpretation involved in making sense of what an individual or business does with certain funds. Although investigators may think that you committed a financial crime, there may be a perfectly reasonable explanation for the way you have conducted business or maintained financial records for your company.
Anything from a review of your financial records to testimony from those allegedly profiting from the money laundering situation could help prove your innocence or at least create a reasonable doubt to prevent a criminal conviction. Reviewing your circumstances carefully can help you plan to defend against allegations of money laundering or similar white-collar criminal charges.