What Is the Difference Between Embezzlement and Money Laundering?
Embezzlement and money laundering are both types of white-collar crimes. They are both financial crimes that involve moving huge amounts of money. However, embezzlement and money laundering are two different crimes. Prosecutors must prove a unique set of elements in order to secure a conviction for each offense. In other words, what a prosecutor needs to prove in an embezzlement case differs from what they need to prove in a money laundering case. Also, the defenses for embezzlement are different from those for money laundering. This article explains the difference between embezzlement and money laundering and the possible penalties for these crimes.
When funds are entrusted to a person, and they misappropriate those funds for financial gain, they have committed the offense of embezzlement. For example, an accountant may divert money from their employer’s bank accounts and create false payments and invoices to hide their actions. Ponzi schemes are another example of embezzlement.
Understanding Money Laundering
When an individual or organization makes money in illegal ways, they cannot just go to the bank and deposit their money. Doing this will raise questions like where the money came from. This is a big problem for people engaged in illegal activities, such as sex or drug trafficking. Such people earn huge amounts of money whose source needs to be concealed. This is where money laundering comes in. Money laundering occurs when a person or an organization disguises the proceeds of unlawful activity as legitimate funds. Money laundering aims to “wash” the dirty money obtained from illegal activities through legal businesses or other legal means so that the money is no longer connected to unlawful activities. After the money has been “cleaned,” the owner can use it without having to worry about attracting the interest of the police.
Difference Between Embezzlement and Money Laundering
Embezzlement involves someone who has been entrusted with funds misappropriating those funds for personal gain. In contrast, money laundering involves concealing the origin of funds that have been obtained illegally to make the funds look legitimate. However, both money laundering and embezzlement are serious crimes. If found guilty of either offense, you risk suffering harsh consequences.
Penalties of Embezzlement and Money Laundering
The penalties for embezzlement and money laundering vary from state to state. But in a case where over $1,000 is embezzled, the offense becomes a federal crime. If you are convicted of federal embezzlement, you risk spending up to 30 years in jail and paying fines of up to millions of dollars. You could also be required to pay restitution to victims. On the other hand, if convicted of federal money laundering, you could spend up to 20 years in jail and pay fines of up to millions of dollars.
Retaining a qualified white-collar defense attorney is crucial if charged with embezzlement or money laundering. A skilled defense attorney can help develop an effective strategy.
Contact an NYC White Collar Crimes Attorney
If you are facing embezzlement or money laundering charges, contact our qualified NYC white-collar crimes attorney, Mark I. Cohen, today. We can help defend you against your charges.