Both money laundering and embezzlement are federal felonies. They carry a minimum penalty of up to 10 years in prison and a minimum of $15,000 fine.
Episode 83: Money Laundering vs Embezzlement
Welcome to the Apostrophe Podcast, where we learn to teach, have to share, and possess the knowledge. I am your host Dr. Bobb Rousseau. In this episode, I share with you comprehensive knowledge to give you a better understanding of what is relevant to your intellectual well-being. Without further ado, let’s begin.
Today, using a real example, I explain the differences between two types of financial crimes: money laundering and embezzlement.
Erick opens a coffee shop, and he hires James as his accountant. Let’s identify the source of the money Eric uses to launch his business and how James handles the coffee bookkeepings.
Erick earns his money from drug and sex trafficking. Since he cannot deposit that money into his bank account, he opens a coffee shop with that money. Although the business makes $1,000 profit every day on average, James, his accountant, agrees to inflate the books by layering a $2,500 daily profit. Eric takes $1,500 from the drug and sex trafficking money, adds it to the $1,000 profits, and deposits them into his bank account.
In simple terms, Erick places his dirty money into a business, hides the trail of the “dirty” money by entering layered fraudulent financial bookkeeping transactions, and integrates his dirty money into the legal financial system. This is money laundering. Money laundering is a process of disguising the proceeds of illegitimate activities through a series of illegal transactions to make it appear legitimate. It’s done with the intention to evade the law and avoid attracting the attention of law enforcement agencies, regulators, or taxing authorities.
James is responsible for making the deposits daily. However, he deposits only $2,000 into the account and pockets the other $500 every day. By year-end, he buys a brand new vehicle with the funds he misappropriated and stole from the coffee shop. This is embezzlement. Embezzlement is the theft of assets entrusted to a person by their employer or someone else. Embezzlers steal or misappropriate funds from their employers or clients, henceforth, violating a position of trust.
Both money laundering and embezzlement are federal felonies. They carry a minimum penalty of up to 10 years in prison and a minimum of $15,000 fine.
In conclusion, I hope you now have a better understanding of the differences between money laundering and embezzlement. These two financial crimes are insidious and destructive, but they can be prevented. By educating ourselves and our organizations, we can better protect ourselves from these types of fraud. Join us next time, where we will be exploring a new type of financial crime.
Bobb Rousseau, PhD
Apostrophe Podcast
Welcome to the Apostrophe Podcast, where we learn to teach, have to share, and possess the knowledge. I am your host Dr. Bobb Rousseau. In this episode, I share with you comprehensive knowledge to give you a better understanding of what is relevant to your intellectual well-being. Without further ado, let’s begin.
Today, using a real example, I explain the differences between two types of financial crimes: money laundering and embezzlement.
Erick opens a coffee shop, and he hires James as his accountant. Let’s identify the source of the money Eric uses to launch his business and how James handles the coffee bookkeepings.
Erick earns his money from drug and sex trafficking. Since he cannot deposit that money into his bank account, he opens a coffee shop with that money. Although the business makes $1,000 profit every day on average, James, his accountant, agrees to inflate the books by layering a $2,500 daily profit. Eric takes $1,500 from the drug and sex trafficking money, adds it to the $1,000 profits, and deposits them into his bank account.
In simple terms, Erick places his dirty money into a business, hides the trail of the “dirty” money by entering layered fraudulent financial bookkeeping transactions, and integrates his dirty money into the legal financial system. This is money laundering. Money laundering is a process of disguising the proceeds of illegitimate activities through a series of illegal transactions to make it appear legitimate. It’s done with the intention to evade the law and avoid attracting the attention of law enforcement agencies, regulators, or taxing authorities.
James is responsible for making the deposits daily. However, he deposits only $2,000 into the account and pockets the other $500 every day. By year-end, he buys a brand new vehicle with the funds he misappropriated and stole from the coffee shop. This is embezzlement. Embezzlement is the theft of assets entrusted to a person by their employer or someone else. Embezzlers steal or misappropriate funds from their employers or clients, henceforth, violating a position of trust.
Both money laundering and embezzlement are federal felonies. They carry a minimum penalty of up to 10 years in prison and a minimum of $15,000 fine.
In conclusion, I hope you now have a better understanding of the differences between money laundering and embezzlement. These two financial crimes are insidious and destructive, but they can be prevented. By educating ourselves and our organizations, we can better protect ourselves from these types of fraud. Join us next time, where we will be exploring a new type of financial crime.
Bobb Rousseau, PhD
Apostrophe Podcast