Money Laundering

It’s no surprise that Money Laundering, under 18 USC § 1956, is frequently charged by federal prosecutors. This isn’t only because of the potential maximum sentence of up to twenty years in federal prison that can be imposed upon conviction or because the average sentence for money laundering offenses by federal judges nationwide is a harsh 70 months, with a whopping 91% of those charged with the crime sentenced to actual prison time. It is also because, in addition to serving time in federal prison, offenders can also be fined up to either $500,000 or two times the total value of the funds involved which, depending on the amount of money involved, can sometimes result in the offender still owing the government millions of dollars in financial penalties after his or her release from prison.

The required elements of money laundering under §1956 are conducting or attempting to conduct a financial transaction involving the proceeds of one of seven (7) statutorily specified categories of unlawful activity knowing the property involved in the financial transaction represents the proceeds of some form of unlawful activity. While the government is not required to prove that the offender knew that the alleged unlawful activity constituted one of the seven categories of unlawful activity specified by the Statute, they must prove beyond a reasonable doubt that the known unlawful activity constituted a felony under State, Federal or foreign law. The government must also prove that the financial transaction was conducted or attempted with the specific intent of promoting or carrying-on of specified unlawful activity, or with the intent of violating certain sections of the Internal Revenue Code, or while knowing that the transaction was designed to conceal or disguise the nature, location, source, ownership or control of the proceeds of specified unlawful activity, or to avoid a transaction reporting requirements under state or federal law.

Transporting, transmitting, or transferring a monetary instrument or funds from a place inside the United States to or through a place outside the US, or vice versa, knowing the monetary instrument or funds represent the proceeds of some form of unlawful activity with similar intent (i.e., Foreign Money Laundering) is also a crime under the Statute. Money Laundering (which is a crime at the State level as well) becomes a federal crime whenever the financial transaction is shown to affect interstate or foreign commerce when moved “by wire or other means”, or when it involves one or more monetary instruments or the transfer of title to any real property, vehicle, vessel or aircraft, or when it involves the use of a financial institution which is engaged in or affects interstate or foreign commerce.

Sentencing enhancements are applied to offenders whom it can be proven knew that the proceeds derived from the underlying transactions involved controlled substances, violence, weapons, or sexual exploitation of minors. Because of the wide range of marijuana offenses that continue to constitute prosecutable federal crimes, money laundering will be (indeed often is) charged federally even when involving proceeds from sales that might otherwise be ignored by states with relaxed enforcement/personal use exemptions. Under the US Sentencing Guidelines, the applicable advisory sentencing ranges are increased by five (5) levels when the specified unlawful activity involves the manufacture, importation, or distribution of narcotics or controlled substances, including marijuana. Enhancements also are applied for using sophisticated means to conduct such financial transactions or for being in the business of money laundering.

Money laundering cases can be complex and nuanced. Federal prosecutors often rely on testimony from expert witnesses (usually rehabilitated money launderers themselves) to help explain how monetary instruments/funds were “journeyed about” or secretly transferred to help conceal their movement and/or unlawful source. At the same time, it is not unusual for federal prosecutors to mischaracterize or portray innocent financial transactions as being criminal in nature. As such, to sustain a conviction under 18 USC 1956, the government is required to prove every element of the crime (not the least being knowledge and intent) beyond a reasonable doubt. Because of this, if you find yourself charged with, or under investigation for, this extremely serious federal felony offense, it is critical you speak with, and only hire, a lawyer who is highly experienced in handling and defending these complicated and complex cases.