Fraud and other white-collar crimes affect Louisiana’s citizens as much as citizens in any other state. In many cases, the nature of the crimes means that the federal government will cooperate with local and state authorities to investigate. Money laundering is one of the most common types of fraud and is typically fueled by criminal activities such as drug enterprises, illegal gambling and prostitution.
Generally, money laundering involves using a series of financial transactions to conceal the origin of money that has been obtained from some illegal activity. The goal is to make the money appear “clean” to institutions such as banks and to avoid creating suspicion so that authorities are not notified that the money is of a mysterious origin. The general process passes the money through many different financial transactions with fake billings and receipts so that it eventually becomes untraceable and its source indistinct from legitimate sources. The laundered money then returns to the original criminal perpetrator.
Some of the most common results of money laundering are tax evasion and accrual of interest on deposits in banks outside the United States. Launderers use offshore accounts, holding companies and shell companies to aid them in the deception. For example, shell business, such as beauty salons, require customers to pay only with cash, making it difficult for authorities to trace money because no customer identity is revealed in any one financial transaction. Perpetrators deposit the money in shell companies, and their operators then deposit the money into separate bank accounts. In the last step, the money – now clean – is withdrawn from those accounts, completing the laundering process.
Anyone accused of money laundering or similar offenses can defend themselves by contesting the evidence presented by prosecutors. Defendants can also present their own evidence that proves the allegations have no merit.
Source: Cornell.edu.com, “Money laundering: an overview,” accessed on Oct. 20, 2014