Money Laundering

Money laundering poses a critical risk to the Australian public, ultimately costing the government billions of dollars each year in an attempt to identify, disrupt and prevent money laundering from happening. Yet money laundering still continues to be a common denominator of almost all serious and organised criminal activity, both nationally and globally.

What is money laundering?

Money laundering is when criminals try to ‘clean’, or ‘launder’, their money earned from particpating in criminal activity, in an attempt to make it appear to have come from a legitimate source. This could be the profits generated from drug trafficking, tax evasion, theft, or other illegal activities. Laundering allows these criminals to use this ‘dirty’ money, without drawing attention to themselves.

It’s incredibly complex and sophisticated, enabling criminal activities to corrupt individuals, businesses and the economy.

How is money laundered?

Money laundering will typically follow a three-stage process to make money appear legitimate, such as:

Placement:

Introducing illegal funds into the formal financial system – such as making regular, structured deposits into a bank account over an extended period of time.

Layering:

Moving, dispersing or disguising illegal funds or assets to conceal their true origin. This processes uses a maze of complex transactions involving multiple banks and accounts, or corporations and trusts.

Integration:

Investing these now distanced funds or assets in further criminal activity or legitimate business, or purchasing high-value assets and luxury goods.

Examples of money laundering

What’s increasingly complicated is that it corrupts legitimate transactions in the banking, finance and gaming sector in particular as high-value assets like luxury vehicles. Here are some of the different methods by which money can be laundered:

• Splitting up large amounts of cash and depositing them separately into bank accounts;
• Creating money trails by moving money around, usually through a number of quick transactions, making it difficult to trace the money back to its original source;
• Using gambling platforms to place ‘dirty’ money into gaming machines
• Using people, who are usually paid a commission, to carry out small transactions or smuggle cash into or out of the country
• Sending smaller value wire transfers to overseas-based beneficiaries over a short period of time.

What are the penalties for laundering money?

The penalties for money laundering will increase with the value of the ‘dirty’ money that has been laundered. In Australia, the most serious offence of laundering over $1 million carries a maximum penalty of 20 years imprisonment. The penalties are categorized by intention, reckless and negligent by the value of money, as per the table below:

More information

Our highly experienced lawyers have extensive experience in dealing with money laundering and other white-collar crimes, and are available to assist you with understanding the law, representing you in court, or answering inquiries.

For further information on money laundering laws and penalties please get in touch with our team.