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Hand in Hand: Tax Evasion and Money Laundering

March 25, 2024 Posted In Criminal Defense,Fraud

Tax evasion and money laundering both involve fraudulent activity involving money and based on deceptive practices. The offenses often occur separately, producing their own charges. While one of the offenses can occur without committing the other, these actions frequently go hand in hand.

Facing tax evasion and money laundering can result in life-altering consequences. A thorough Atlanta criminal defense is critical if you are facing these accusations. It is also essential to guard against additional charges that may be attributed to your actions, whether intentional or not.

How Tax Evasion and Money Laundering Charges Differ

Tax evasion pertains to money earned through lawful activities, but the income earner seeks to avoid paying the taxes they owe on it. Tax evasion can take many forms, some of which resemble the acts used in money laundering. Individuals commit tax evasion to avoid paying taxes owed by using fraudulent tactics.

Money laundering involves illegally obtained funds, often gained through specified unlawful activity (SUA) with some intent or knowledge while making it appear to have originated from a legitimate source. The money is then moved about through multiple transactions into different financial institutions or banks, making its origins more challenging to detect to try and create untraceable and confusing transactions.

When Tax Evasion and Money Laundering May Go Together

Sometimes, crimes are part of a larger scheme or criminal activity. The initial action is an illegal act, but it is performed as part of a more illicit, significant act. One example is an individual earning an income from a specified unlawful activity and then acting to avoid paying the taxes owed, possibly facing charges for both actions. Often, tax evasion makes it more effortless to diffuse the attention that income earned through an illegal action may garner.

Money laundering charges may also come into play when an individual uses legally gained money to fund a specified unlawful activity. The act of transferring money to fund an SUA may also be performed with the intent to evade taxes and hide the source of the funds.

Both offenses may carry harsh penalties under the law, whether committed separately or together. They should be taken seriously and defended rigorously.

Predicate Offenses, Tax Evasion, and Money Laundering

Predicate offenses are illegal actions taken as part of a larger criminal scheme or plan. While tax evasion does not have to occur to engage in money laundering and vice versa, other actions that may be taken in both tax evasion and money laundering schemes may predicate a criminal plan to commit the other illegal action.

Committing tax evasion does not require an individual to have also committed money laundering. However, someone may commit tax fraud to cover predicating offenses like wire or mail fraud. Committing tax fraud to hide these offenses may also result in a charge of money laundering due to these predicting offenses often associated with money laundering.

Defense is Vital Against Charges of Atlanta Tax Evasion and Money Laundering

Protecting against multiple charges stemming from predicate offenses is critical, particularly when RICO laws may apply. Charges resulting in convictions under RICO laws may carry state and federal punishments, resulting in stiff penalties and prison time. Schedule a free review of your case to begin fighting against tax evasion or money laundering charges in Atlanta.