II

105TH CONGRESS

2D SESSION S. 2011

To strengthen the Federal prosecution and seizure of illegal proceeds of

international drug dealing and criminal activity, and to provide for the

drug testing and treatment of incarcerated offenders and reduce drug

trafficking in correctional facilities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 30, 1998

Mr. LEAHY (for himself, Mr. DASCHLE, Mr. KOHL, Mrs. FEINSTEIN, and Mr.

CLELAND) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To strengthen the Federal prosecution and seizure of illegal

proceeds of international drug dealing and criminal activity, and to provide for the drug testing and treatment

of incarcerated offenders and reduce drug trafficking

in correctional facilities, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Money Laundering Enforcement and Combatting Drugs

6 in Prisons Act of 1998’’.
2

•S 2011 IS

1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—INTERNATIONAL MONEY LAUNDERING

Sec. 101. Short title.

Sec. 102. Illegal money transmitting businesses.

Sec. 103. Restraint of assets of persons arrested abroad.

Sec. 104. Access to records in bank secrecy jurisdictions.

Sec. 105. Civil money laundering jurisdiction over foreign persons.

Sec. 106. Laundering money through a foreign bank.

Sec. 107. Specified unlawful activity for money laundering.

Sec. 108. Criminal forfeiture for money laundering conspiracies.

Sec. 109. Fungible property in foreign bank accounts.

Sec. 110. Subpoenas for bank records.

Sec. 111. Fugitive disentitlement.

Sec. 112. Admissibility of foreign business records.

Sec. 113. Charging money laundering as a course of conduct.

Sec. 114. Venue in money laundering cases.

Sec. 115. Technical amendment to restore wiretap authority for certain money

laundering offenses.

TITLE II—DRUG TESTING AND INTERVENTION FOR INMATES

AND PROBATIONERS

Sec. 201. Short title.

Sec. 202. Additional requirements for the use of funds under the violent offender incarceration and truth-in-sentencing incentive grant

programs.

Sec. 203. Use of residential substance abuse treatment grants to provide for

services during and after incarceration.

3 TITLE I—INTERNATIONAL

4 MONEY LAUNDERING

5 SEC. 101. SHORT TITLE.

6 This title may be cited as the ‘‘Money Laundering

7 Enforcement Act of 1998’’.

8 SEC. 102. ILLEGAL MONEY TRANSMITTING BUSINESSES.

9 (a) CIVIL FORFEITURE FOR MONEY TRANSMITTING

10 VIOLATION.—Section 981(a)(1)(A) of title 18, United

11 States Code, is amended by striking ‘‘or 1957’’ and insert12 ing ‘‘, 1957, or 1960’’.
3

•S 2011 IS

1 (b) SCIENTER REQUIREMENT FOR SECTION 1960

2 VIOLATION.—Section 1960 of title 18, United States

3 Code, is amended by adding at the end the following:

4 ‘‘(c) SCIENTER REQUIREMENT.—For the purposes of

5 proving a violation of this section involving an illegal

6 money transmitting business—

7 ‘‘(1) it shall be sufficient for the Government to

8 prove that the defendant knew that the money trans9 mitting business lacked a license required by State

10 law; and

11 ‘‘(2) it shall not be necessary to show that the

12 defendant knew that the operation of such a busi13 ness without the required license was an offense

14 punishable as a felony or misdemeanor under State

15 law.’’.

16 SEC. 103. RESTRAINT OF ASSETS OF PERSONS ARRESTED

17 ABROAD.

18 Section 981(b) of title 18, United States Code, is

19 amended by adding at the end the following:

20 ‘‘(3) RESTRAINT OF ASSETS.—

21 ‘‘(A) IN GENERAL.—If any person is arrested

22 or charged in a foreign country in connection with

23 an offense that would give rise to the forfeiture of

24 property in the United States under this section or

25 under the Controlled Substances Act, the Attorney
4

•S 2011 IS

1 General may apply to any Federal judge or mag2 istrate judge in the district in which the property is

3 located for an ex parte order restraining the prop4 erty subject to forfeiture for not more than 30 days,

5 except that the time may be extended for good cause

6 shown at a hearing conducted in the manner pro7 vided in Rule 43(e) of the Federal Rules of Civil

8 Procedure.

9 ‘‘(B) APPLICATION.—An application for a re10 straining order under subparagraph (A) shall—

11 ‘‘(i) set forth the nature and circumstances

12 of the foreign charges and the basis for belief

13 that the person arrested or charged has prop14 erty in the United States that would be subject

15 to forfeiture; and

16 ‘‘(ii) contain a statement that the restrain17 ing order is needed to preserve the availability

18 of property for such time as is necessary to re19 ceive evidence from the foreign country or else20 where in support of probable cause for the sei21 zure of the property under this subsection.’’.

22 SEC. 104. ACCESS TO RECORDS IN BANK SECRECY JURIS23 DICTIONS.

24 Section 986 of title 18, United States Code, is

25 amended by adding at the end the following:
5

•S 2011 IS

1 ‘‘(d) ACCESS TO RECORDS LOCATED ABROAD.—

2 ‘‘(1) IN GENERAL.—In any civil forfeiture case,

3 or in any ancillary proceeding in any criminal for4 feiture case governed by section 413(n) of the Con5 trolled Substances Act (21 U.S.C. 853(n)), the re6 fusal of the claimant to provide financial records lo7 cated in a foreign country in response to a discovery

8 request or take the action necessary otherwise to

9 make the records available, shall result in the dis10 missal of the claim with prejudice, if—

11 ‘‘(A) the financial records may be mate12 rial—

13 ‘‘(i) to any claim or to the ability of

14 the government to respond to such claim;

15 or

16 ‘‘(ii) in a civil forfeiture case, to the

17 ability of the government to establish the

18 forfeitability of the property; and

19 ‘‘(B) it is within the capacity of the claim20 ant to waive his or her rights under such se21 crecy laws, or to obtain the financial records

22 himself or herself, so that the financial records

23 may be made available.

24 ‘‘(2) PRIVILEGE.—Nothing in this subsection

25 shall be construed to affect the rights of a claimant
6

•S 2011 IS

1 to refuse production of any records on the basis of

2 any privilege guaranteed by the Constitution of the

3 United States or any other provision of Federal

4 law.’’.

5 SEC. 105. CIVIL MONEY LAUNDERING JURISDICTION OVER

6 FOREIGN PERSONS.

7 Section 1956(b) of title 18, United States Code, is

8 amended—

9 (1) by redesignating paragraphs (1) and (2) as

10 subparagraphs (A) and (B), respectively, and indent11 ing each subparagraph appropriately;

12 (2) by striking ‘‘(b) Whoever’’ and inserting the

13 following:

14 ‘‘(b) CIVIL PENALTIES.—

15 ‘‘(1) IN GENERAL.—Whoever’’; and

16 (3) by adding at the end the following:

17 ‘‘(2) JURISDICTION.—For purposes of adju18 dicating an action filed or enforcing a penalty or19 dered under this section, the district courts of the

20 United States shall have jurisdiction over any for21 eign person, including any financial institution au22 thorized under the laws of a foreign country, that

23 commits an offense under subsection (a) involving a

24 financial transaction that occurs in whole or in part

25 in the United States, if service of process upon such
7

•S 2011 IS

1 foreign person is made in accordance with the Fed2 eral Rules of Civil Procedure or the laws of the for3 eign country in which the foreign person is found.

4 ‘‘(3) SATISFACTION OF JUDGMENT.—In any ac5 tion described in paragraph (2), the court may issue

6 a pretrial restraining order or take any other action

7 necessary to ensure that any bank account or other

8 property held by the defendant in the United States

9 is available to satisfy a judgment under this sec10 tion.’’.

11 SEC. 106. LAUNDERING MONEY THROUGH A FOREIGN

12 BANK.

13 Section 1956(c)(6) of title 18, United States Code,

14 is amended to read as follows:

15 ‘‘(6) the term ‘financial institution’ includes—

16 ‘‘(A) any financial institution described in

17 section 5312(a)(2) of title 31, or the regula18 tions promulgated thereunder; and

19 ‘‘(B) any foreign bank, as defined in sec20 tion 1(b)(7) of the International Banking Act of

21 1978 (12 U.S.C. 3101(7));’’.

22 SEC. 107. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY

23 LAUNDERING.

24 (a) IN GENERAL.—Section 1956(c)(7) of title 18,

25 United States Code, is amended—
8

•S 2011 IS

1 (1) in subparagraph (B)—

2 (A) by striking clause (ii) and inserting the

3 following:

4 ‘‘(ii) any act or acts constituting a

5 crime of violence;’’; and

6 (B) by adding at the end the following:

7 ‘‘(iv) fraud, or any scheme to defraud,

8 committed against a foreign government or

9 foreign governmental entity;

10 ‘‘(v) bribery of a public official, or the

11 misappropriation, theft, or embezzlement

12 of public funds by or for the benefit of a

13 public official;

14 ‘‘(vi) smuggling or export control vio15 lations involving munitions listed in the

16 United States Munitions List or tech17 nologies with military applications as de18 fined in the Commerce Control List of the

19 Export Administration Regulations; or

20 ‘‘(vii) an offense with respect to which

21 the United States would be obligated by a

22 multilateral treaty either to extradite the

23 alleged offender or to submit the case for

24 prosecution, if the offender were found

25 with the territory of the United States;’’;
9

•S 2011 IS

1 (2) in subparagraph (D)—

2 (A) by inserting ‘‘section 541 (relating to

3 goods falsely classified),’’ before ‘‘section 542’’;

4 (B) by inserting ‘‘section 922(l) (relating

5 to the unlawful importation of firearms), sec6 tion 924(m) (relating to firearms trafficking),’’

7 before ‘‘section 956’’;

8 (C) by inserting ‘‘section 1030 (relating to

9 computer fraud and abuse),’’ before ‘‘1032’’;

10 and

11 (D) by inserting ‘‘any felony violation of

12 the Foreign Agents Registration Act of 1938

13 (22 U.S.C. 611 et seq.),’’ before ‘‘or any felony

14 violation of the Foreign Corrupt Practices Act’’;

15 and

16 (3) in subparagraph (E), by inserting ‘‘the

17 Clean Air Act (42 U.S.C. 6901 et seq.),’’ after ‘‘the

18 Safe Drinking Water Act (42 U.S.C. 300f et seq.),’’.

19 SEC. 108. CRIMINAL FORFEITURE FOR MONEY LAUNDER20 ING CONSPIRACIES.

21 Section 982(a)(1) of title 18, United States Code, is

22 amended by inserting ‘‘or a conspiracy to commit any such

23 offense,’’ after ‘‘of this title,’’.
10

•S 2011 IS

1 SEC. 109. FUNGIBLE PROPERTY IN FOREIGN BANK AC2 COUNTS.

3 Section 984(d) of title 18, United States Code, is

4 amended by adding at the end the following:

5 ‘‘(3) In this subsection, the term ‘financial institu6 tion’ includes a foreign bank, as defined in section 1(b)(7)

7 of the International Banking Act of 1978 (12 U.S.C.

8 3101(7)).’’.

9 SEC. 110. SUBPOENAS FOR BANK RECORDS.

10 Section 986(a) of title 18, United States Code, is

11 amended—

12 (1) by striking ‘‘section 1956, 1957, or 1960 of

13 this title, section 5322 or 5324 of title 31, United

14 States Code’’ and inserting ‘‘section 981 of this

15 title’’;

16 (2) by inserting ‘‘before or’’ before ‘‘after’’; and

17 (3) by striking the last sentence.

18 SEC. 111. FUGITIVE DISENTITLEMENT.

19 (a) IN GENERAL.—Chapter 163 of title 28, United

20 States Code, is amended by adding at the end the follow21 ing:

22 ‘‘§ 2467. Fugitive disentitlement

23 ‘‘Any person who, in order to avoid criminal prosecu24 tion, purposely leaves the jurisdiction of the United States,

25 declines to enter or reenter the United States to submit

26 to the jurisdiction of the United States, or otherwise
11

•S 2011 IS

1 evades the jurisdiction of a court of the United States in

2 which a criminal case is pending against the person, may

3 not use the resources of the courts of the United States

4 in furtherance of a claim in any related civil forfeiture ac5 tion or a claim in any third-party proceeding in any relat6 ed criminal forfeiture action.’’.

7 (b) CONFORMING AMENDMENT.—The analysis for

8 chapter 163 of title 28, United States Code, is amended

9 by adding at the end the following:

‘‘2467. Fugitive disentitlement.’’.

10 SEC. 112. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.

11 (a) IN GENERAL.—Chapter 163 of title 28, United

12 States Code, is amended by adding at the end the follow13 ing:

14 ‘‘§ 2468. Foreign records

15 ‘‘(a) DEFINITIONS.—In this section—

16 ‘‘(1) the term ‘business’ includes business, insti17 tution, association, profession, occupation, and call18 ing of every kind whether or not conducted for prof19 it;

20 ‘‘(2) the term ‘foreign certification’ means a

21 written declaration made and signed in a foreign

22 country by the custodian of a record of regularly

23 conducted activity or another qualified person, that

24 if falsely made, would subject the maker to criminal

25 penalty under the law of that country;
12

•S 2011 IS

1 ‘‘(3) the term ‘foreign record of regularly con2 ducted activity’ means a memorandum, report,

3 record, or data compilation, in any form, of acts,

4 events, conditions, opinions, or diagnoses, main5 tained in a foreign country; and

6 ‘‘(4) the term ‘official request’ means a letter

7 rogatory, a request under an agreement, treaty or

8 convention, or any other request for information or

9 evidence made by a court of the United States or an

10 authority of the United States having law enforce11 ment responsibility, to a court or other authority of

12 a foreign country.

13 ‘‘(b) ADMISSIBILITY.—In a civil proceeding in a court

14 of the United States, including a civil forfeiture proceeding

15 and a proceeding in the United States Claims Court and

16 the United States Tax Court, unless the source of infor17 mation or the method or circumstances of preparation in18 dicate lack of trustworthiness, a foreign record of regu19 larly conducted activity (or a duplicate of such record),

20 obtained pursuant to an official request, shall not be ex21 cluded as evidence by the hearsay rule if a foreign certifi22 cation, also obtained pursuant to the same official request

23 or subsequent official request that adequately identifies

24 such foreign record, attests that—
13

•S 2011 IS

1 ‘‘(1) the foreign record was made, at or near

2 the time of the occurrence of the matters set forth,

3 by (or from information transmitted by) a person

4 with knowledge of those matters;

5 ‘‘(2) the foreign record was kept in the course

6 of a regularly conducted business activity;

7 ‘‘(3) the business activity made such a record

8 as a regular practice; and

9 ‘‘(4) if the foreign record is not the original, the

10 record is a duplicate of the original.

11 ‘‘(c) FOREIGN CERTIFICATION.—A foreign certifi12 cation under this section shall authenticate a record or

13 duplicate described in subsection (b).

14 ‘‘(d) NOTICE.—

15 ‘‘(1) IN GENERAL.—As soon as practicable

16 after a responsive pleading has been filed, a party

17 intending to offer in evidence under this section a

18 foreign record of regularly conducted activity shall

19 provide written notice of that intention to each other

20 party.

21 ‘‘(2) OPPOSITION.—A motion opposing admis22 sion in evidence of a record under paragraph (1)

23 shall be made by the opposing party and determined

24 by the court before trial. Failure by a party to file

25 such motion before trial shall constitute a waiver of
14

•S 2011 IS

1 objection to such record, except that the court for

2 cause shown may grant relief from the waiver.’’.

3 (b) CONFORMING AMENDMENT.—The analysis for

4 chapter 163 of title 28, United States Code, is amended

5 by adding at the end the following:

‘‘2468. Foreign records.’’.

6 SEC. 113. CHARGING MONEY LAUNDERING AS A COURSE OF

7 CONDUCT.

8 Section 1956(h) of title 18, United States Code, is

9 amended—

10 (1) by striking ‘‘(h) Any person’’ and inserting

11 the following:

12 ‘‘(h) CONSPIRACY; MULTIPLE VIOLATIONS.—

13 ‘‘(1) CONSPIRACY.—Any person’’; and

14 (2) by adding at the end the following:

15 ‘‘(2) MULTIPLE VIOLATIONS.—Any person who

16 commits multiple violations of this section or section

17 1957 that are part of the same scheme or continuing

18 course of conduct may be charged, at the election of

19 the Government, in a single count in an indictment

20 or information.’’.

21 SEC. 114. VENUE IN MONEY LAUNDERING CASES.

22 Section 1956 of title 18, United States Code, is

23 amended by adding at the end the following:

24 ‘‘(i) VENUE.—
15

•S 2011 IS

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), a prosecution for an offense under this

3 section or section 1957 may be brought in any dis4 trict in which the financial or monetary transaction

5 is conducted, or in which a prosecution for the un6 derlying specified unlawful activity could be brought.

7 ‘‘(2) EXCEPTION.—A prosecution for an at8 tempt or conspiracy offense under this section or

9 section 1957 may be brought in the district in which

10 venue would lie for the completed offense under

11 paragraph (1), or in any other district in which an

12 act in furtherance of the attempt or conspiracy took

13 place.’’.

14 SEC. 115. TECHNICAL AMENDMENT TO RESTORE WIRETAP

15 AUTHORITY FOR CERTAIN MONEY LAUNDER16 ING OFFENSES.

17 Section 2516(1)(g) of title 18, United States Code,

18 is amended by striking ‘‘of title 31, United States Code

19 (dealing with the reporting of currency transactions)’’ and

20 inserting ‘‘or 5324 of title 31 (dealing with the reporting

21 and illegal structuring of currency transactions)’’.
16

•S 2011 IS

1 TITLE II—DRUG TESTING AND

2 INTERVENTION FOR INMATES

3 AND PROBATIONERS

4 SEC. 201. SHORT TITLE.

5 This title may be cited as the ‘‘Combatting Drugs

6 in Prisons Act of 1998’’.

7 SEC. 202. ADDITIONAL REQUIREMENTS FOR THE USE OF

8 FUNDS UNDER THE VIOLENT OFFENDER IN9 CARCERATION AND TRUTH-IN-SENTENCING

10 INCENTIVE GRANT PROGRAMS.

11 Section 20105(b) of the Violent Crime Control and

12 Law Enforcement Act of 1994 (42 U.S.C. 13705(b)) is

13 amended—

14 (1) by striking ‘‘(b) To be eligible’’ and insert15 ing the following:

16 ‘‘(b) ADDITIONAL REQUIREMENTS.—

17 ‘‘(1) ELIGIBILITY FOR A GRANT.—To be eligi18 ble’’;

19 (2) by striking ‘‘a State shall provide assur20 ances’’ and inserting the following: ‘‘a State shall—

21 ‘‘(A) provide assurances’’;

22 (3) by striking the period at the end and insert23 ing ‘‘; and’’; and

24 (4) by adding at the end the following:
17

•S 2011 IS

1 ‘‘(B) not later than September 1, 1998,

2 have established and implemented, consistent

3 with guidelines issued by the Attorney General,

4 a program of drug testing and intervention for

5 appropriate categories of convicted offenders

6 during periods of incarceration and criminal

7 justice supervision, with sanctions (including

8 denial or revocation of release) for positive drug

9 tests.

10 ‘‘(2) USE OF FUNDS.—Notwithstanding section

11 20102, amounts received by a State pursuant to sec12 tion 20103 or section 20104 may be—

13 ‘‘(A) applied to the cost of offender drug

14 testing and appropriate intervention programs

15 during periods of incarceration and criminal

16 justice supervision, consistent with guidelines

17 issued by the Attorney General;

18 ‘‘(B) used by a State to pay the costs of

19 providing to the Attorney General a baseline

20 study, which shall be consistent with guidelines

21 issued by the Attorney General, on the prison

22 drug abuse problem in the State; and

23 ‘‘(C) used by a State to develop policies,

24 practices, or laws establishing, in accordance

25 with guidelines issued by the Attorney General,
18

•S 2011 IS

1 a system of sanctions and penalties to address

2 drug trafficking within and into correctional fa3 cilities under the jurisdiction of the State.’’.

4 SEC. 203. USE OF RESIDENTIAL SUBSTANCE ABUSE TREAT5 MENT GRANTS TO PROVIDE FOR SERVICES

6 DURING AND AFTER INCARCERATION.

7 Section 1901 of part S of the Omnibus Crime Control

8 and Safe Streets Act of 1968 (42 U.S.C. 3796ff) is

9 amended by adding at the end the following:

10 ‘‘(c) ADDITIONAL USE OF FUNDS.—Each State that

11 demonstrates that the State has established 1 or more res12 idential substance abuse treatment programs that meet

13 the requirements of this part may use amounts made

14 available under this part for drug treatment and to impose

15 appropriate sanctions for positive drug tests, both during

16 incarceration and after release.’’.

Æ