Source: https://www.johntfloyd.com/practice-areas/money-laundering/
Timestamp: 2019-04-25 13:50:47+00:00

Document:
The Anti-Drug Abuse Act of 1986, Pub.L. No. 99-570, created the offense of “money laundering,” which is chargeable as a violation of 18 U.S.C. §§ 1956 or 1957. Violations of the mail or wire fraud statutes constitute “specified unlawful activity” that may form the cornerstone of a money laundering charge. See §§ 1956(c)(7)(A), 1957(f)(3), and 1961(1)(B) (“Specified unlawful activity” is defined as any act or activity constituting an offense listed in section 1961(1), which includes both mail and wire fraud statutes.). See United States v. Hare, 49 F.3d 447, 451-52 (8th Cir. 1995), cert. denied, 116 S.Ct. 211 (1995); United States v. Massey, 48 F.3d 1560, 1565-67 (10th Cir.), cert. denied, 115 S.Ct. 2628 (1995); United States v. Smith, 44 F.3d 1259, 1264-65 (4th Cir.), cert. d ied, 115 S.Ct. 1970 (1995).
Section 1956(a) defines three types of criminal conduct: domestic money laundering transactions (§ 1956(a)(1)); international money laundering transactions (§ 1956(a)(2)); and undercover “sting” money laundering transactions (§ 1956(a)(3)).
To prove a violation of § 1956(a)(1), the prosecutor must prove, either by direct or circumstantial evidence, that the defendant knew that the property involved was the proceeds of any felony under State, Federal or foreign law. The prosecutor need not show that the defendant knew the specific crime from which the proceeds were derived; the prosecutor must prove only that the defendant knew that the property was illegally derived in some way. See § 1956(c)(1). The prosecutor must also prove that the defendant initiated or concluded, or participated in initiating or concluding, a financial transaction. A “transaction” is defined in § 1956(c)(3) as a purchase, sale, loan, pledge, gift, transfer, delivery, other disposition, and with respect to a financial institution, a deposit, withdrawal, transfer between accounts, loan, exchange of currency, extension of credit, purchase or sale safe-deposit box, or any other payment, transfer or delivery by, through or to a financial institution.
A “financial transaction” is defined in § 1956(c)(4) as a transaction which affects interstate or foreign commerce and: (1) involves the movement of funds by wire or by other means; (2) involves the use of a monetary instrument; or (3) involves the transfer of title to real property, a vehicle, a vessel or an aircraft; or (4) involves the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce. The legislative history indicates, and several cases have held, that each separate financial transaction should be charged separately in an individual count. For example, if an individual earns $100,000 from offense. If he then withdraws $50,000, he commits a second offense. If he then purchases a car with the withdrawn $50,000, he commits a third offense. Each transaction should be charged in a separate count. Charging multiple financial transactions in a single count is duplicitous. See, e.g., United States v. Prescott, 42 F.3d 1165 (8th Cir. 1994); United States v. Conley, 826 F. Supp. 1536 (W.D. Pa. 1993).
The transportation, transmission or transfer must cross the border — either originating or terminating in the United States. That term includes all means of transporting funds or monetary instruments, including wire or electronic funds transfers, and the transfer of currency, checks, money orders, bearer securities and negotiable instruments.
Prosecutions under 18 U.S.C. § 1957 arise when the defendant knowingly conducts a monetary transaction in criminally derived property in an amount greater than $10,000, which is in fact proceeds of a specified unlawful activity. Section 1957(f)(1) defines a monetary transaction as a “deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument . . . by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) . . . .” Section 1957 carries a maximum penalty of ten years in prison and maximum fine of $250,000 or twice the value of the transaction. There is no civil penalty provision.
Sections 1956 and 1957 include “attempts” as well as completed offenses. Conspiracies are indictable under 18 U.S.C. § 1956(h). It should be noted that, in October 1992, Congress added § 1956(g), which provides a separate offense for money laundering conspiracy. Since Congress inadvertently added two sections designated as § 1956(g), the conspiracy provision was redesignated § 1956(h) in September 1994. The conspiracy provision in § 1956(h) is modeled after the conspiracy provision in 21 U.S.C. § 846. Thus, it should not be necessary to plead overt acts in the indictment. However, the Section recommends that overt acts be included in the indictment if practicable.
(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.
(b) For purposes of Subsection (a)(3) of this section, a person is presumed to believe that funds are the proceeds of criminal activity if a peace officer or a person acting at the direction of a peace officer represents to the person that the funds are proceeds of criminal activity, regardless of whether the peace officer or person acting at the peace officer’s direction discloses the person’s status as a peace officer or that the person is acting at the direction of a peace officer.

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