Money laundering is a somewhat complicated criminal offense involving money and usually some sort of fraud. While money laundering is a crime on its own, it is often accompanied by other financial crimes and may be wrapped up in racketeering schemes. It is a federal offense, and various federal agencies may have authority over suspected money laundering cases.

The IRS is not the only agency with an interest in detecting financial and fraud offenses. If you are suspected of engaging in money laundering, you might be investigated by the FBI, state and local authorities, and even financial institutions like banks. How the investigation goes may depend on which authority or agency is in charge of the case. Sometimes, multiple agencies work together to investigate money laundering. Most investigations involve combing through financial records, banking records, and other forensic accounting methods used to detect fraud. Remember, money laundering is a federal crime and may be met with harsh penalties that can seriously impact your future financial opportunities. If you are being investigated, call a lawyer immediately.

Speak to our white-collar crimes lawyers at the Liberty Law Team by calling (215) 826-3314 and ask about a free, private review of your case to begin.

Who Investigates Money Laundering?

Money laundering is a federal crime under the Money Laundering Control Act of 1986. As such, suspected cases of money laundering are typically handled by federal authorities. Exactly which federal authority or agency investigates may depend on the unique facts of the case. The IRS has a huge interest in financial crimes, and they may play a significant role in a criminal investigation.

The IRS Criminal Investigations Division handles many financial crimes apprehended by the IRS. For example, if the IRS flags your tax returns for any reason and determines that money laundering might be going on, the Criminal Investigation Division may launch an investigation. They have the authority to investigate almost any violation of the Internal Revenue Code, including money laundering.

It is also possible that the Federal Bureau of Investigations (FBI) may also investigate cases of money laundering. The FBI may have jurisdiction over almost any federal offense, such as money laundering. Federal investigations from the FBI can be very tough to endure, and they are often extremely thorough.

While the IRS and FBI may investigate, many money laundering cases start at the state or local level. Money laundering often involves financial fraud using a business as a front. It is possible the criminal scheme draws the attention of local police or state authorities before working its way up to the federal authorities.

Even banks and other financial institutions may conduct their own investigations. If they believe someone is using them to launder money, they may investigate on their own. Once they have enough evidence to believe that money laundering is indeed happening, they may report the case to federal authorities. Even if a bank does not initiate an investigation or raise the first alarm, the federal authorities will likely rely on them for assistance in investigating things like banking and financial records.

How Money Laundering May Be Investigated

How an investigation proceeds can be hard to predict. Oftentimes, we do not know the inner workings of an investigation until the authorities move in to arrest. However, criminal investigations typically must follow certain legal rules and procedures. Knowing how an investigation may be conducted might help us understand how to fight the charges against you.

Generally, there must be something to lead the authorities to investigate. Often, the IRS or other financial institutions notice something off about your accounts or assets. They might dig a little deeper and find that money cannot be accounted for if there are suspicious gaps in paper trails. While these red flags do not always automatically mean something criminal is happening, they are regarded as suspicious.

There may be something like a preliminary investigation or analysis. Depending on which organization or governmental authority. A special agent may be assigned to review your financial records and determine if there is anything suspicious or worth looking into. As the investigation progresses, the authorities might dig into banking and financial records. They may also use forensic accounting methods to determine where money is going, where it is coming from, and whether it is being laundered.

What is Money Laundering and Why is it a Federal Offense?

Money laundering is a financial crime often wrapped up in other white-collar crimes and fraud. Money laundering is when someone illegally hides or covers up the illicit origins of ill-gotten gains. For example, if someone makes money from racketeering and organized crime, they will likely launder their profits, so the money appears to have been obtained legally. How this happens is sometimes complex and hard to track. In many cases, people use seemingly legitimate businesses as a front for their illegal activities to launder money.

According to 18 U.S.C. § 1956(a), whoever knowingly engages in money laundering may be fined up to $500,000 or double the value of the illegally obtained property, whichever is more. Alternatively, a person may be sentenced to prison for up to 20 years. It is also possible to be fined and incarcerated.

Money laundering is often associated with large-scale crimes and organized crime. As such, penalties tend to be harsh, and investigations are thorough.

What to Do if You Are Being Investigated for Money Laundering

If you are under investigation for money laundering, your first step should be to hire an experienced attorney. Federal authorities might already be investigating, and we never know how soon law enforcement will make an arrest.

It is a good idea to get all your financial and banking records together. If you have records and documentation proving that your money was not illegally obtained, we need to save it as evidence. This can be complicated for people with complex finances. We may need personal and business financial information to help build your defense.

We should also begin preparing how we will deal with the authorities when they confront you. As part of their investigation, the IRS, FBI, or other law enforcement agencies may speak directly to you about the case. Remember, they are looking for evidence, and anything you say might be used against you later. However, there might be times when providing information to the authorities will help you. Your attorney can help you know what to do.

Call Our White-Collar Crimes Attorneys if You Are Being Investigated for Money Laundering

Talk to our Philadelphia criminal defense attorneys at the Liberty Law Team by calling (215) 826-3314 and ask about a free, confidential assessment of your case to begin.