Money Laundering: Do You Know Where Your Customer's Money Is Coming From?


Federal law enforcement has become extremely aggressive in financial investigations for criminal activity. With the global financial crisis, hundreds of bank failures, multibillion-dollar Ponzi schemes, and financial credit crunch, federal law enforcement agencies such as the FBI, IRS-CI, and DOJ are constantly looking for suspected money laundering activities. This article is a brief primer on the money laundering

statutes and provides some practical advice on how businesses should be aware of the source of funds they receive and what they need to do to avoid unnecessary exposure to violations of federal law.

Contrary to popular Hollywood depictions, money laundering does not only occur when a drug trafficker spends his illicit cash to buy a fancy sports car. The IRS describes the crime generally as “activities and financial transactions that are undertaken specifically to hide the true source of the money. In most cases, the money involved is earned from an illegal enterprise and the goal is to give that money the appearance of coming from a legitimate source.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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