In recent years, numerous stricter laws have been implemented in the area of money laundering. This concerns, firstly, the scope of the money laundering offense (§ 261 of the German Criminal Code). Secondly, the legal reporting obligations for suspicious financial transactions have also been expanded. The German Money Laundering Act (GWG) implements European regulations and obliges numerous professional groups to implement extensive prevention and control measures and to report suspicious financial transactions. This regularly leads to tensions between client protection, confidentiality, and legal reporting obligations. Accordingly, handling suspected cases correctly is challenging. Violations of reporting obligations can result in substantial fines.
This dynamic means that, particularly in fast-paced or complex economic sectors, even law-abiding individuals can fall under suspicion. Unusual financial transactions, in particular, can unintentionally trigger suspicious activity reports. Beyond the criminal consequences, an accusation of money laundering can also have serious economic and reputational repercussions – for example, if the trust of business partners or customers is shaken.
Our law firm, specializing in white-collar crime, offers you sound experience and a high level of commitment. The goal of our work is to consistently enforce your rights in the proceedings and to ensure competent, strategically sound advice and defense.
Money laundering – when does it become a crime?
For an offense to be punishable under Section 261 Paragraph 1 of the German Criminal Code (StGB), the following conditions, among others, must be met:
- The asset originates directly or indirectly from an unlawful act (so-called incriminated asset).
The so-called "all-crime principle" applies, meaning that, in principle, all unlawful offenses are considered predicate offenses suitable for money laundering. This can include all assets, such as receivables, real estate, and company shares.
- The offense of money laundering encompasses a wide range of behaviors in which the incriminated assets are introduced into the financial and economic cycle, thereby concealing the true origin of these assets, for example through: acquiring, transferring, exchanging, holding or hiding them.
- The perpetrator is aware of the illegal origin (intent) or he has recklessly failed to recognize that the object originates from an unlawful act (recklessness).
Negligence presupposes recklessness and can be assumed if the criminal origin is obvious, for example in the case of unusually large cash payments or services that are incompatible with the stated sources of income.
How is money laundering detected?
Money laundering is uncovered, for example, as a result of reports to the so-called Financial Intelligence Unit (FIU).
A wide range of professional groups are obligated under the Money Laundering Act to report suspicious transactions. These include credit institutions (banks), financial service providers, insurance companies, real estate agents, notaries, tax advisors, auditors, and potentially also lawyers.
The number of suspicious activity reports submitted to the FIU has risen sharply in recent years. These reports are frequently forwarded by the FIU to the public prosecutor's office, where they are then pursued as money laundering investigations.
What are the penalties for money laundering?
The basic offense (simple money laundering) carries a penalty of up to five years' imprisonment or a fine. For persons obligated under the Money Laundering Act (Section 261 Paragraph 4 of the German Criminal Code), the penalty is increased to imprisonment of three months to five years. In particularly serious cases (Section 261 Paragraph 5 of the German Criminal Code) – for example, in cases of commercial or organized crime – the penalty increases to imprisonment of six months to ten years. For negligent conduct (Section 261 Paragraph 6 of the German Criminal Code), the penalty is imprisonment of up to two years or a fine.
The actual sentence imposed depends on the specific circumstances of each case and is usually significantly lower than the maximum sentence stipulated by law. Factors relevant to sentencing include, for example, prior convictions and the amount of the crime. Assets from the predicate offense and the behavior after the act.
Under certain conditions, complete immunity from prosecution is possible (§ 261 para. 8 StGB), for example if the perpetrator voluntarily reports the offense to the competent authority and the assets are secured – provided that the offense had not yet been discovered at the time of the report and the perpetrator knew this or could not reasonably expect it.
A possible consequence of criminal proceedings for money laundering is the confiscation of proceeds of crime. In this case, the perpetrator or accomplice is deprived of what they obtained through a criminal offense. Furthermore, the state can also order the confiscation of assets from individuals who are not themselves facing criminal charges (so-called confiscation parties). The confiscation of assets in criminal proceedings can have economic repercussions that are more severe than the threatened punishment. It is therefore important to be aware of the possibility of confiscation early on and to take appropriate legal action against it.
Furthermore, additional economic and professional consequences may ensue. Managing directors could lose their positions. Companies risk license revocations and substantial fines. Fines against companies are also possible even without a specific individual being identified as the accused.
This is how we support you in the event of a money laundering allegation.
Our law firm specializing in white-collar crime offers you individual, dedicated and discreet defense.
Our experienced criminal defense lawyers ensure that your rights are protected. We request access to the case file early on and realistically assess the evidence. Together, we develop a defense strategy tailored to your specific situation. The earlier we are involved in the proceedings, the greater the chances of positively influencing the criminal case in your favor and preventing or minimizing criminal consequences and financial losses.
Are you under investigation for suspected money laundering?
We recommend that you first exercise your right to remain silent and contact a criminal defense lawyer.
We offer personal and individual consultations. Please feel free to contact us to schedule an appointment.
Money laundering refers to activities that introduce assets derived from criminal offenses into the financial and economic system, thereby concealing their true origin. The offense of money laundering includes, for example, acquiring, transferring, exchanging, holding, or concealing these assets.
Besides so-called organized crime, real estate, financial services, art dealing, car dealing and gambling are considered particularly risky.
The Money Laundering Act establishes identification, recording, determination and notification obligations for numerous business areas.
The transparency register, regulated in Sections 18 et seq. of the German Money Laundering Act (GWG), is a register for recording the beneficial owners of companies and legal arrangements. Violations of the transparency register are subject to fines.
Signs of money laundering can include, for example: large amounts of cash, origin from countries outside the EU where corruption or other crime is prevalent, services that are inconsistent with the stated sources of income, payments from unknown persons, sales where the market value differs significantly from the purchase price.
Depending on the severity, sanctions range from fines to ten years imprisonment.
Yes. A variety of circumstances can lead to a reduction in sentence in a specific case, such as full cooperation with the authorities, complete disclosure, and taking early action. A timely self-report can also result in immunity from prosecution. You should discuss which measures are advisable in your case with a criminal defense attorney.
A particularly serious case may exist in the case of commercial activity or acting as a member of a gang.
Every criminal proceeding begins with an initial suspicion, which leads to the initiation of an investigation. The investigation concludes with an indictment, a penal order, or the dismissal of the case, for example, due to insufficient suspicion of a crime or upon the imposition of conditions. Following an indictment, a main trial and a court hearing are usually held. The main trial typically ends with a verdict or, in some cases, with a dismissal. Subsequently, an appeal may be pursued.
For example, an investigation will be discontinued if it turns out that there is no sufficient suspicion of a crime or that the public interest in prosecution is so low that discontinuation subject to conditions is possible.
Money laundering offenses generally have a five-year statute of limitations. The limitation period begins as soon as the offense is completed. A variety of circumstances can cause the statute of limitations to expire significantly later.
Through review of case files, legal assessment, and strategic defense. Early engagement and defense increase the chances of avoiding severe penalties and, in suitable cases, even achieving a dismissal of the proceedings.