Fort Worth Money Laundering Defense Attorney

There are essentially three money laundering statutes routinely utilized by various United States Attorney’s offices across the country:

LAUNDERING OF MONETARY INSTRUMENTS

18 U.S.C. § 1956, which is entitled “Laundering of Monetary Instruments”, provides (in pertinent part):

(a)

(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity –

(A)(i) with the intent to promote the carrying on of specified unlawful activity; or
(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole or in part –
(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.

(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States –

(A) with the intent to promote the carrying on of specified unlawful activity; or

(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part-

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of not more than $500,000 or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater, or imprisonment for not more than twenty years, or both. For the purpose of the offense described in subparagraph (B), the defendant's knowledge may be established by proof that a law enforcement officer represented the matter specified in subparagraph

(B) as true, and the defendant's subsequent statements or actions indicate that the defendant believed such representations to be true.

(3) Whoever, with the intent –

(A) to promote the carrying on of specified unlawful activity;

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or

(C) to avoid a transaction reporting requirement under State or Federal law, conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term "represented" means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

In a section 1956 prosecution it is not necessary for the government to show that the defendant actually intended or anticipated an effect on interstate commerce by his actions or that commerce was actually affected. All that is necessary is that the natural and probable consequence of the acts the defendant took would be to affect interstate commerce. If you decide that there would be any effect at all on interstate commerce, then that is enough to satisfy this element. The effect can be minimal. Furthermore, when the money laundering prosecution is based on a "conceal or disguise" theory, the government must show that the defendant desired to create the appearance of legitimate wealth or otherwise conceal the nature of funds so that it might enter the economy as legitimate funds.

For appropriate understanding some of the terms and phrases utilized in section 1856 (above) require some elaboration and explanation by definition:

"knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity" - means that the person knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law, regardless of whether or not such activity is specified in 18 U.S.C. § 1956(c)(7).

"conducts" includes initiating, concluding, or participating in initiating, or concluding a transaction.

"transaction" - includes a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition, and with respect to a financial institution includes a deposit, withdrawal, transfer between accounts, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument, use of a safe deposit box, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected.

"financial transaction" - means (A) a transaction which in any way or degree affects interstate or foreign commerce (i) involving the movement of funds by wire or other means or (ii) involving one or more monetary instruments, or (iii) involving the transfer of title to any real property, vehicle, vessel, or aircraft, or (B) a transaction involving the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce in any way or degree.

"proceeds" includes any property, or any interest in property, that someone acquires or retains as a result of the commission of the underlying specified unlawful activity. Proceeds can be any kind of property, not just money.

"monetary instruments" - means coin or currency of the United States or of any other country, travelers' checks, personal checks, bank checks, and money orders, Id. § 1956(c)(5)(i), investment securities or negotiable instruments, in bearer form or otherwise in such form that title thereto passes upon delivery.
"financial institution" - includes- any financial institution, as defined in 31 U.S.C. § 5312(a)(2) or the regulations promulgated thereunder, Id. § 1956(c)(6)(A); and any foreign bank, as defined in section 1 of the International Banking Act of 1978 (12 U.S.C. 3101).

"State" - includes a State of the United States, the District of Columbia, and any commonwealth, territory, or possession of the United States.

ENGAGING IN MONETARY TRANSACTIONS IN PROPERTY DERIVED FROM SPECIFIED UNLAWFUL ACTIVITY

18 U.S.C. § 1957, which is entitled “Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity”, is the second lesser-used statute under which a prosecution for money laundering can occur. Specifically, it is a violation of section 1957(a) for a person, in a certain set of circumstances, to "knowingly" engage or attempt to engage, in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity.

The circumstances that apply to section 1957(a) are that the offense under this section takes place in the United States or in the special maritime and territorial jurisdiction of the United States, 18 U.S.C. § 1957(d)(1); or that the offense under this section takes place outside the United States and such special jurisdiction, but the defendant is a United States person (as defined in 18 U.S.C. § 3077), other than an employee or contractor of the United States who is the victim or intended victim of an act of terrorism by virtue of that employment.

However, it is important to note that it is not an element of a violation of section 1957 that the defendant actually knows the offense from which the criminally derived property was derived was a specified unlawful activity.

The punishment for a violation of section 1957 is a fine, imprisonment for not more than ten years, or both. Alternatively, the court may impose a fine of not more than twice the amount of the criminally derived property involved in the transaction.

Just as in section 1856, some of the terms and phrases utilized in section 1857 also require some elaboration and explanation by definition:

"monetary transaction" - means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined by 18 U.S.C. § 1956(C)(5)) by, through, or to a financial institution (as defined in section 1956), including any transaction that would be a financial transaction under section 1956(c)(4)(B), but such term does not include any transaction necessary to preserve a person's right to representation as guaranteed by the sixth amendment to the Constitution;

"criminally derived property" - means any property constituting, or derived from, proceeds obtained from a criminal offense; and "specified unlawful activity" has the meaning given that term in section 1956.

18 U.S.C. § 1956(c)(7) contains a non-exclusive laundry list of specified unlawful activities that will trigger prosecution under the section 1957 money laundering statute. Some of the most common triggering activities include:

the manufacture, importation, sale, or distribution of a controlled substance (as such term is defined for the purposes of the Controlled Substances Act), 18 U.S.C. § 1956(c)(7)(B)(i);

murder, kidnapping, robbery, extortion, destruction of property by means of explosive or fire, or a crime of violence (as defined in 18 U.S.C. § 16), 18 U.S.C. § 1956(c)(7)(B)(ii); fraud, or any scheme or attempt to defraud, by or against a foreign bank (as defined in 12 U.S.C. § 3101(7)), 18 U.S.C. § 1956(c)(7)(B)(iii);

bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official, Id. § 1956(c)(7)(B)(iv);
trafficking in persons, selling or buying of children, sexual exploitation of children, or transporting, recruiting or harboring a person including a child, for commercial sex acts; 18 U.S.C. § 1956(c)(7)(B)(vii).

any act or acts constituting a continuing criminal enterprise, (as defined at 21 U.S.C. § 848), 18 U.S.C. § 1956(c)(7)(C);
an offense falling under the following statutes:

STRUCTURING TRANSACTIONS TO EVADE REPORTING REQUIREMENTS

31 U.S.C. § 5324(a)(3) makes it a crime for anyone to structure, attempt to structure, or assist in structuring any transaction with one or more domestic financial institutions in order to evade the reporting requirements of § 5313(a) of Title 31 of the United States Code. Section 5313(a) and its implementing regulations require the filing of a government form called a Currency Transaction Report (CTR). Those regulations require that every domestic financial institution which engages in a currency transaction of over $10,000 must file a report with the Internal Revenue Service furnishing, among other things, the identity and address of the person engaging in the transaction, the person or entity, if any, for whom he is acting, and the amount of the currency transaction.

The Currency Transaction Report must be filed within 15 days of the transaction.

The punishment for a violation of this statute is a fine, imprisonment for not more than five years, or both. In order to convict the government must prove each of the following beyond a reasonable doubt:

That the individual charged defendant knowingly structured, attempted to structure, or assisted in structuring a currency transaction;

That the individual knew of the domestic financial institution's legal obligation to report transactions in excess of $10,000;

That the purpose of the structured transaction was to evade that reporting obligation; and/or

That the individual violated this law while violating another law of the United States, specifically as part of a pattern of illegal activity involving more than $100,000 in a 12-month period. This element is only required when the indictment alleges facts which would result in an enhanced penalty under 31 U.S.C. § 5324(c).

A person structures a transaction if that person, acting alone or with others, conducts one or more currency transactions in any amount, at one or more financial institutions, on one or more days, for the purpose of evading the reporting requirements described earlier. Structuring includes breaking down a single sum of currency exceeding $10,000 into smaller sums, or conducting a series of currency transactions, including transactions at or below $10,000. Illegal structuring can exist even if no transaction exceeded $10,000 at any single financial institution on any single day.

It is not necessary for the government to prove that the individual knew that structuring a transaction to avoid triggering the filing requirements was itself illegal. The government need prove beyond a reasonable doubt only that the individual structured, assisted in structuring, or attempted to structure currency transactions with knowledge of the reporting requirements and with the specific intent to avoid said reporting requirements.

If you or someone you know is in need of a skilled Fort Worth criminal attorney because of money laundering charges please contact the law firm of Roderick C. White.