An Overview of Federal Money Laundering Charges

man handing over money

When you think about money laundering, you probably think of how ill-gotten gains are turned into funds that can be used outside of criminal channels, but there is a lot more to the charge of money laundering. The laundering of money comes after the fact of the original crime involved and might strike you as less serious than the actual crime. Often, however, the money laundering itself – which is a crime in its own right – is just as serious a matter as whatever crime led to the money that needed to be laundered in the first place. If you face money laundering charges (or any other criminal charges – whether federal or state), you need the professional legal counsel of a formidable McLennan County criminal defense lawyer on your side.

Section 1956

Section 1956 of the federal government’s main criminal code is one of the primary sections that generally guides money laundering cases. Section 1956 involves activities that include engaging in financial transactions that are intended to conceal proceeds acquired via criminal means, using these proceeds to promote criminal activity, or using these proceeds to evade taxes. It is worth noting that a single violation of even one of the provisions in section 1956 can lead to a prison sentence of up to 20 years. Section 1956 specifically prohibits all the following:

  • Being involved in financial transactions that are intended to conceal the criminal nature of the proceeds involved

  • Being involved in financial transactions that promote further criminal activity

  • Being involved in financial transactions that are intended to evade paying taxes

In order to understand the exact meaning of these charges, it is important to better understand the terms.

Proceeds

Proceeds in this context mean any receipts from the precipitating criminal activity.

Financial Transaction

The financial transaction requirement can be met by an act as simple as handing off cash from one person to another.

Concealment

Concealment here refers to the defendant’s specific design to conceal, which is based on the accused’s purpose in the transaction (and not on the ultimate effect). Factors that tend to address this issue include whether the transaction involved secrecy, the level of that secrecy, the nature of the transaction itself, and any irregularities involved in the transaction.

Promotion

Finally, promotion is a fairly straightforward element of the charge that may not require anything more than demonstrating that the transaction facilitated the ongoing nature of the underlying crime. In drug crimes, however, the court generally finds that any money laundering must be distinct from the drug crime itself, which means that it is not enough for the defendant to have sold drugs and to have received money in return in order to warrant a separate money laundering charge.

Additional Factors

There are also other factors that can play pivotal roles in specific kinds of cases.

Knowledge

To be found guilty of money laundering, the accused must have knowledge of the money’s tainted quality in the first place – but it is not necessary that he or she has specific knowledge regarding the kind of criminal activity that was involved. Further, if the government can demonstrate that the accused was willfully blind to the fact that the funds were ill-gotten, it can suffice regarding the knowledge requirement.

Predicate Offense

Additionally, the government must be able to show that the allegedly laundered funds came from a specific list of predicate offenses that include:

  • Arson

  • Robbery

  • Gambling

  • Bribery

  • Drug offenses

  • Fraud

  • Dealings involving obscene material

  • murder

Tax Evasion

When money laundering involves evading taxes, the government is not required to demonstrate that the accused knew his or her actions violated tax laws on the books. Instead, the government must be able to show that the accused’s actions were intentional – rather than inadvertent.

Section 1957

In order for a charge to hold under section 1957, the government must prove that the accused engage in one of the following:

  • Promoting criminal activity

  • Concealing the proceeds from criminal activity

  • Evading taxes on the proceeds from criminal activity

  • Structuring transactions to avoid requirements regarding cash reporting

Very generally, section 1957 renders it illegal to either spend or deposit any funds that bear the taint of criminal activity.

In order to convict on a charge under this section, both of the following must apply:

  • The defendant engaged in a monetary transaction that exceeded $10,000.

  • The defendant knew the funds involved were related to a specific kind of offense that includes murder, drug crimes, dealings involving obscene materials, gambling, bribery, fraud, arson, and kidnapping.

A conviction under section 1957 can carry prison time of up to 10 years.

Structuring

A common money laundering charge relates to activities involving structuring, which refers to structuring one’s cash transactions to work outside of the governmental requirement to report any cash transactions that exceed $10,000. Often, this amounts to defendants allegedly breaking large transactions down into smaller parts to avoid triggering a bank’s mandatory transaction report. A structuring violation can carry up to five years behind bars.

Willful Failure to Report Cash Transactions

Engaging in willful failure to report a cash transaction is very similar to a structuring offense, but it involves doing so by means other than structuring. If the government can prove that the defendant was avoiding the reporting requirement, it can lead to a sentence of up to five years in prison.

Reach out to an Experienced McLennan County Criminal Defense Lawyer Today

If you are facing a money laundering charge – or any criminal charge – Brett Pritchard at The Law Office of Brett H. Pritchard in McLennan County, Texas, is a compassionate criminal defense lawyer who is well positioned and well prepared to skillfully fight for your rights – in zealous pursuit of your case’s optimal outcome. Our practiced legal team focuses on our clients’ best interests throughout the legal process, so please do not hesitate to contact or call us at 254-501-4040 today to learn more about how we can also help you.

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