It can be complicated: What is money laundering?

On Behalf of | Sep 5, 2018 | Financial Crimes

If you’re of a certain vintage, you flatly know that things are different these days concerning interactions at your bank and the transactions you conduct there than they were years ago.

Banks were always careful, but they’ve really taken diligence concerning customer identity and questions surrounding deposits to a new level, haven’t they? Older consumers were unquestionably surprised when they first began confronting heightened transaction-linked requirements at their financial institutions decades back. In a nutshell, banks suddenly became more rigorous in their customer identity checks and their questions and oversight regarding deposits of specified threshold amounts (e.g., $5,000 initially, later $10,000).

That diligence owed to seminal federal law originally passed by Congress back in 1970 denoted the Bank Secrecy Act.

Its narrow and notably focused purpose: to identify and punish instances of money laundering. As an in-depth overview of that subject notes, the BSA’s initial thrust targeted organized crime. It was progressively expanded over subsequent decades to encompass a focus on illegal drug transactions and, ultimately, domestic and global terrorist activity.

Unsurprisingly, the ramped-up spotlight on bank transactions ushered in by the BSA and its numerous revisions over the years has been challenged by Americans who view officials’ over-the-shoulder scrutiny of their financial dealings as being unconstitutionally invasive. Specifically, complaints have been lodged that challenge money-laundering laws on grounds that they violate Fourth Amendment rights against unreasonable search and seizure.

Obviously, those challenges have failed: money-laundering legislation has grown inexorably expansive and detailed across recent decades and is now a widely accepted given.

The above-cited primer on money laundering law notes that, although it is well entrenched, it is not well understood generally. It is both complex and intricate, which can create serious problems for individuals who run afoul of state and federal authorities alleging laundering-linked criminal activity.

We will have a bit more to say about money laundering in our next blog post.

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