What is Money Laundering?
When individuals commit a crime, they often do so to make money. But because this money can link them to the crime, they need to disguise the source of their illegal funds. This is referred to as money laundering.
According to the United Nations Office on Drugs and Crime, between $800 billion and $2 trillion is laundered every year. Much of this money comes from organized crime, white-collar offenses, drug trafficking, and tax evasion. We often think of money laundering as associated only with organized crime, but it also relates to someone working for cash and not reporting his or her earnings.
Here is what you need to know about money laundering in New Mexico:
How Money Laundering Works
People sometimes go to great lengths to disguise the origin of their income, but in general, there is a three-stage process to money laundering:
First, the money needs to get into the financial system. Then, it is moved around so that it is hard to trace. Finally, it is brought back into the system as if it were legitimate. These three stages of the money-laundering process are called:
- Placement,
- Layering, and
- Integration.
Some common examples of money laundering include:
- Smuggling money out of the country and into a secret offshore bank account, where it will be hidden until it is able to be drawn out as legitimate income.
- Breaking large amounts of illegally obtained money into small amounts, which will then be used to purchase money orders and other financial instruments to avoid detection or suspicion.
- Investing in cash-intensive businesses – such as strip clubs, bars, nightclubs, car washes, and parking lots – to disguise the illegal funds as everyday business proceeds.
- Creating shell companies and trusts that are used to disguise the true origin of large amounts of illegally obtained money.
- Purchasing real estate with illicit funds, then selling the property to make it seem as though the profits are legitimate.
- Going into a casino with illicit funds to buy chips and play for a while, then cashing out the chips and claiming that money as gambling winnings.
New Mexico Money Laundering Laws
New Mexico money laundering statutes make it illegal to transfer funds derived from illegal activities into legitimate channels in order to conceal the source of the funds. In other words, in order to be guilty of money laundering, the prosecutor needs to prove that you attempted to conceal the actual origin of the funds, and make it appear as if they came from legitimate sources.
Furthermore, to be guilty of money laundering, the source of the funds must have been an illegal activity. So, for example, selling an asset and trying to hide the proceeds of the transaction would not be considered money laundering, because the act of selling your car was not illegal. You may be guilty of the crime of tax evasion, but not money laundering.
What’s more, you don’t even need to be directly involved in money laundering to be guilty of the crime. If you work for a regulated bank or financial institution, it is an offense to fail to report suspicion of money laundering; you would also be guilty if you were to warn or tip-off a client that you, or someone else, suspects him or her of money laundering.
Penalties for Money Laundering in New Mexico
New Mexico divides money laundering into four different classes, based on the amount of money involved in the crime:
Misdemeanor money laundering – The amount of money involved is $10,000 or less. Misdemeanors are punishable by up to six months in county jail or a fine of up to $500, or both.
Fourth-degree felony money laundering – The amount of the money involved is over $10,000, but not more than $50,000. Fourth-degree felonies are punishable by up to 18 months in prison and a fine of up to $5,000.
Third-degree felony money laundering – The amount of money involved is over $50,000 but not more than $100,000. Third-degree felonies are punishable by up to three years in prison and a fine of up to $5,000.
Second-degree felony money laundering – The amount of money involved is over $100,000. Second-degree felonies are punishable by up to nine years in prison and a fine of up to $10,000.
In addition, if found guilty of money laundering, you may be subject to a civil judgement for three times the amount of the funds involved. Furthermore, you may be subject to both civil and criminal remedies under New Mexico’s Racketeering and Controlled Substances laws, in addition to the penalties you receive for money laundering.
Albuquerque White Collar Crime Defense Attorneys
White collar crime convictions can result in felony convictions, which can equate to years spent in prison and a felony criminal record. Call the New Mexico Criminal Law Offices today at (505) 375-4664, or contact us online to begin consulting with an experienced white collar criminal attorney about your case.