What is federal money laundering? An overview by a federal criminal defense attorney and former federal money laundering prosecutor.
Money laundering. It’s a term that conjures images of shadowy figures and suitcases full of cash. Many conclude money laundering investigations only involved drug trafficking cartels. But what exactly does it mean, and what are the legal ramifications? This blog post aims to demystify federal money laundering charges in the United States, providing a clear overview of this complex crime.
What is Money Laundering?
At its core, money laundering is the process of disguising the origins of illegally obtained money, making it appear to have come from legitimate sources. Criminals engage in money laundering to avoid detection and enjoy the fruits of their illicit activities without raising red flags. Think of it as “washing” dirty money to make it clean. Hence, the term “laundering”.
This “washing” can take many forms. It might involve a series of complex financial transactions, transferring funds through multiple accounts or shell corporations. It could also involve simpler methods, like purchasing high-value assets with cash and then reselling them for a profit. The ultimate goal is to create a seemingly legitimate paper trail for the money.
What are the elements of federal money laundering?
To secure a conviction for money laundering under 18 U.S.C. 1956(a)(1)(B)(i), the government must prove:
1. The use of funds that are proceeds of unlawful activity.
2. Knowledge that the funds are proceeds derived from an unlawful activity.
3. Conduction or attempt to conduct a financial transaction, knowing that the transaction is designed in whole or part to disguise the nature, location, source, ownership, or control of the proceeds.
For conspiracy to commit money laundering, the government must prove that the defendants knew of the conspiracy and voluntarily joined it. Additionally, the government must prove that the defendants:
1.Knowingly conducted a financial transaction;
2.That involved the proceeds of an unlawful activity;
3.With the intent to promote or further that unlawful activity.
Under 18 U.S.C. 1957(a), the elements required to establish money laundering are:
1. Property valued at more than $10,000 was derived from specified unlawful activity.
2. The perpetrator engaged in a monetary transaction with this property.
3. The perpetrator knew that this property was derived from unlawful activity.
To prove a federal money laundering charge under 18 U.S.C. 1956(a)(1)(B)(i), the government must demonstrate that the defendant used funds derived from unlawful activity, knew the funds were from such activity, and conducted or attempted to conduct a financial transaction designed to disguise the nature, location, source, ownership, or control of the proceeds. This aligns with the requirements for conspiracy to commit money laundering, where the government must show that the defendants knowingly conducted a financial transaction involving proceeds of unlawful activity with the intent to promote or further that activity.
For charges under 18 U.S.C. 1957(a), the government must prove that the property involved was valued at more than $10,000, derived from specified unlawful activity, and that the defendant knew the property was derived from unlawful activity. The definition of proceeds as gross receipts rather than profits is crucial in these cases, as it broadens the scope of what can be considered laundered money.
What is the potential punishment for federal money laundering?
Potential punishments for money laundering are severe. Violations of 1956 can result in up to 20 years of imprisonment and a fine of up to $250,000. Convictions under 1957 can lead to up to 10 years of imprisonment and a fine of up to $250,000 or twice the value of the laundered funds. Additionally, funds and property involved in the money laundering scheme are subject to forfeiture. The U.S. Sentencing Guidelines provide different methods for calculating sentences based on whether the defendant also committed the underlying offense or laundered money only.
Facing Federal Money Laundering Charges?
Being investigated or charged with federal money laundering is a serious matter with potentially severe consequences. If you find yourself in this situation, it’s crucial to take swift and decisive action.
- Seek Legal Counsel Immediately and do not speak to law enforcement without representation.
The first and most critical step is to retain experienced legal counsel specializing in federal money laundering cases. A skilled attorney can explain the charges against you, protect your rights, and guide you through the complexities of the legal process. Do not speak to law enforcement or anyone else about your case without first consulting your lawyer. Your attorney can communicate with investigators on your behalf and ensure your statements are not misinterpreted or used against you.
- Understand the Charges
Federal money laundering encompasses a range of activities designed to conceal the source of illegally obtained funds. These activities can include depositing illicit funds into legitimate businesses, transferring money across borders to obscure its origin, or using complex financial transactions to make the money appear legitimate. Your attorney will help you understand the specific charges against you, the potential penalties you face, and the evidence the prosecution may present. This understanding is crucial for developing an effective defense strategy.
- Gather and Preserve Evidence
Work closely with your attorney to gather and preserve any evidence that may support your defense. This could include financial records, business documents, correspondence, or witness testimonies. The sooner you begin this process, the better the chances of preserving crucial evidence that might otherwise be lost or overlooked. Do not fabricate or destroy documents- such conduct will lead to further charges.
- Prepare for the Legal Process
Federal money laundering cases can be complex and lengthy. Be prepared for a potentially long legal battle involving investigations, court appearances, and negotiations with the prosecution. Your attorney will guide you through each step of the process, ensuring you are well-informed and prepared for what lies ahead.
Remember: Being charged with federal money laundering is a serious matter, but it is not the end of the road. By taking swift action, seeking expert legal counsel, and developing a strong defense strategy, you can navigate this challenging situation and protect your future. This blog post is for informational purposes only and does not constitute legal advice. Consult with a qualified attorney for advice tailored to your specific situation.