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When does money laundering turn into a federal drug crime?

On Behalf of | Dec 13, 2023 | Federal Crimes |

In the world of crime, money often needs to be ‘cleaned’ to hide how the person or entity got it. This is what money laundering is all about. But when does it cross the line and become a federal drug crime?

Money laundering becomes a federal drug crime when the ‘dirty’ money comes from drug trafficking or other drug-related illegal activities. This means if someone is making money from selling drugs and then tries to hide where that money came from, they are not just laundering money. They are also committing a federal drug crime.

Federal involvement

When money laundering involves drug activities, it is not just a regular crime anymore. It becomes a federal issue. The federal government takes drug crimes very seriously. So, if you launder money from drug activities, you are facing serious trouble with federal law.

Laundering methods

How someone launders money can vary. Someone may manipulate invoices when trading globally or use cryptocurrencies. Some of the more common methods include:

  • Smurfing: This involves taking a large sum of money and breaking it down into smaller, less suspicious amounts and depositing it into various bank accounts.
  • Shell companies: When fake businesses are set up to move money around discreetly and people funnel the illicit funds through these entities, they are using shell companies.
  • Real estate investments: Criminals can purchase high-value properties with illicit funds, making it difficult for authorities to trace the money’s source.

No matter which method someone uses, if the money started as drug money, the law sees it as part of the drug crime.

It is important to understand how serious money laundering is when connected to drugs and that the consequences can be significant. Those convicted can receive penalties that include, among others, 25 years or more in prison. Knowing this is a federal drug crime can help you avoid getting entangled in drug-related money laundering activities.