This blog post discusses the definition of “money laundering”. It was written by Addison Cameron-Huff, a lawyer who specializes in Bitcoin. He highly recommends that you seek legal counsel to obtain advice about money laundering.
Photo from http://www.flickr.com/photos/59937401@N07/5857345827
“Money laundering is the process used to disguise the source of money or assets derived from criminal activity” according to FINTRAC, Canada’s money laundering regulator.
Money laundering is how criminals earn money illegally and convert it, through a series of steps, into money indistinguishable from legitimately earned income. The “series of steps” that money launderers use are diverse and constantly changing as they attempt to outwit law enforcement/tax authorities.
The OECD’s Financial Action Task Force explains the reason why criminals need to launder money:
“In order to be able to spend money openly, criminals will seek to ensure that there is no direct link between the proceeds of their crime and the actual illegal activities. They may also seek to construct a plausible explanation for an apparent legal origin of the money that they possess. In this way, criminals seek to “launder” their proceeds of crime before spending or investing it in the legal economy.”
The primary source of law in Canada regarding money laundering is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. There are also Criminal Code offences (to be covered in future posts).