What Is The Difference Between Criminals Who Engage In Money Laundering And Tax Evasion - Research Paper Example

What Is The Difference Between Criminals Who Engage In Money Laundering And Tax Evasion? The differences can be apparently observed in terms of the intention of a criminal to conduct any crime, the penalty which is imposed over a criminal and the moral along with the personal values that influence a criminal for performing crime among others. Hence, a clear depiction of the differences has been presented in this paper. Value-Belief-Norm Theory The aim of this research paper will be to depict the difference between criminals who engage in money laundering and tax evasion.

In this regard, the theory of Value-Belief-Norm can be taken into concern. According to this theory, actions of an individual are directly influenced by his/her moral and personal values that impose considerable impact upon the behavioral attitudes. Hence, these psychological aspects further forms as a difference between a normal individual and a criminal. Money can often be duly considered as one of the prime reasons for which most of the criminal activities happen in this world. In this regard, one of the commonly identified crimes associated with money is the aspect of money laundering.

Money-laundering is regarded as the process through which criminals of all sorts cover the origin of their wealth in order to avoid suspicions from various law-enforcement agencies. This is also performed by the people with the intention of hiding evidences that could lead to their trail in front of the law. Money laundering can be executed through several ways that include structuring and round tripping among the primary ones. In the method of structuring, money is broken into several small deposits that reduce the chances of any suspicion from various law enforcement agencies.

In relation to the method of round tripping, money distorts the market, further lessening the chances for law enforcers to detect the money (UNODC, 2013; [1] Legal Information Institute, n.d.). In terms of law, money laundering is considered as a crime and penalty is thus imposed on people involved in laundering money. E.g. 18 USC § 1956 of law depicts that any person who is involved in laundering of monetary instruments through any means can be penalized with a fine of $ 5, 00,000 or twice the value of the money laundered.

The reason that influences people towards money laundering is quite clear from the above analysis. However, certain psychological theory is deemed to be associated with such behavior of people. The Value-Belief-Norm theory explains this particular aspect in a better form. The theory illustrates that actions of individuals are completely correlated with their personal values and norms that influences them to behave in a certain way. This depicts that it is the personal values of people that encourages them to involve in crimes like money laundering which they think to be ethical based on their individual norms (Stern, Dietz, Abel, Guagnano, & Kalof, 1999; [2] Legal Information Institute, n.d.).

Tax evasion Tax evasion is often considered as avoidance of tax by individuals, corporate houses or any other trust. In simple terms, it can be explained as the behavior of the tax payers, wherein they deliberately attempts to avoid paying taxes through misrepresenting their financial statements in front of the tax authorities. Tax evasion can be done through making fraudulent reporting of tax, depicting less income and through overstating deductions among others (McGee, 2011). In law, tax evasion is a serious crime where the accused might have to deal with severe penalty. E.g.

26 USC § 7201 of law in United States depicts that a person or a corporate house who is willingly involved in any sort of tax evasion can be fined up to $ 1, 00,000 in case of