Money Laundering: How Is Money Laundered? Legal Guide

On repeated occasions you will have heard talk about «black money» or «money under the table«, which generally refers to cash that has not been declared to the tax authorities. In this article we are going to explain to you how money is laundered and what money laundering is. To do this, the first thing we are going to do is differentiate it from «dirty money» which is that obtained from criminal activities such as:

• Drug trafficking
• Fraud and embezzlement
• Human trafficking
• Arms smuggling
• Extortion
• Terrorism
• Or lastly tax evasion or crimes against the Public Treasury.

But is all dirty money from illegal activities?

The fact that money is opaque and has been kept hidden (black money) does not necessarily imply a money laundering crime, although it may constitute a tax crime if the other requirements are met.

In contrast, money that comes from a crime (dirty money) is relevant for money laundering. In many cases, dirty money will be black. But not all black money is dirty, nor is all dirty money black.

What happens if I have received gifts from someone convicted of money laundering?

To be convicted of a money laundering offense, it is necessary to have actively participated in the money laundering process, either by concealing its origin or incorporating it into the legal economy.

Receiving gifts or money from a family member convicted of money laundering does not imply that they come from the crime, unless there are suspicious transactions. Rent payments are also not considered money laundering.

However, some gifts such as luxury jewelry or high-end cars could require us to return them if they are understood to come from criminal activity.

What activities are considered money laundering?

• Concealment of assets: A common method to launder money is transferring assets to third parties’ names, thus disguising their illegal origin. This involves buying and selling properties or art at inflated prices to hide the true source of the money.
• Integration of assets: In this phase of money laundering, cash is converted into goods and services to make detection difficult. International transfers are made and accounts in tax havens are used to hide the ownership and origin of funds, completing the money laundering process.
• Complex financial transactions: Creating shell companies or utiliz

What are the prison sentences for money laundering?

The crime of money laundering is a financial crime against the socioeconomic order that is regulated in articles 301 to 304 of the Criminal Code and in the Law 10/2010 on the prevention of money laundering and terrorist financing.

The penalties for money laundering will depend on the activity and origin of the money. The penalty for money laundering is six months to 6 years imprisonment. But when the money comes from activities such as drug trafficking, urban planning crimes, corruption, bribery, influence peddling, embezzlement, fraud or activities prohibited to public officials. The judge will impose a penalty for money laundering of imprisonment from three years and three months up to six years imprisonment.

It also punishes with penalties for the crime of money laundering of six months to two years imprisonment, those who, without having participated directly, help the perpetrators to take advantage of money laundering. In addition, those who conceal money for illegal activities may be disqualified from practicing their profession for two to five years.

The leaders, administrators or managers of a organization dedi