Money Laundering Defense Lawyer

What Kinds of Conduct do §§1956 and 1957 Prohibit?

The first three categories under §1956(a), each share three core offenses which specifically criminalize financial transactions that: (1) promote the continued success of a specified unlawful activity (SUA), (2) attempt to conceal or disguise the nature, source, or control of unlawfully acquired proceeds, and (3) avoid a state or federal transaction reporting requirement. Beyond these similarities, each category has distinct features that are addressed in further detail below.

Domestic Money Laundering

1956(a)(1) targets money laundering activity in the United States and is broken down into four specific crimes – the three noted above, plus a fourth offense which criminalizes financial transactions that involve tax evasion or false statements related to tax requirements (§1956(a)(1)(A)(ii)). Each of these four offenses prohibit a financial transaction, or attempted transaction, that involves money or property generated by a specified unlawful activity (SUA), which includes a wide range of criminal acts.  To convict a defendant under a §1956(a)(1) offense, a federal prosecutor must also show that the defendant knew that the money or property were proceeds from some unlawful activity (more broadly defined than an SUA). It is not necessary that all the proceeds be illegal, the Government only needs to show that some of the proceeds are illegal. 

International Money Laundering

Similarly, §1956(a)(2) is comprised of the three distinct offenses noted above – promotion §1956(a)(2)(A), concealment §1956(a)(2)(B)(i) and reporting avoidance §1956(a)(2)(B)(ii). Unlike its domestic counterpart, a conviction under §1956(a)(2) does not require a financial transaction, but merely the transport or transfer (or an attempted transport or transfer) of a monetary instrument or funds from a U.S. location to somewhere outside the U.S., or to a U.S. location from somewhere outside the U.S. A monetary instrument can include U.S. or foreign currency, travelers’, personal or bank checks, as well as stocks, bonds or other negotiable instruments. An additional distinction involves the international promotion offense, §1956(a)(2)(A), which, unlike the other two international offenses, does not require that the defendant knew that the monetary instrument or funds involved in the transport or transfer represented the proceeds of some unlawful activity. 

Money Laundering Stings

1956(a)(3) involves money that an undercover law enforcement officer falsely represents to be the proceeds of an unlawful activity as part of a sting operation – when law enforcement uses deception to catch a person committing a crime. As with the domestic and international offenses, §1956(a)(3) is comprised of the three core offenses – promotion §1956(a)(3)(A), concealment §1956(a)(3)(B) and reporting avoidance §1956(a)(3)(C). An element unique to the offenses of this section requires the Government to prove that a defendant knowingly conducted, or merely attempted to conduct, a financial transaction which affects interstate or foreign commerce in some way.

Money Laundering Spending

1957 is a single offense that criminalizes the spending or deposit of proceeds from an unlawful activity as well as the actions of third parties who choose to do business with anyone attempting to spend or deposit such proceeds.  To convict a defendant under §1957, the Government must show that the defendant engaged, or attempted to engage, in a monetary transaction. A monetary transaction and a financial transaction both require the use of a financial institution, but a monetary transaction differs from a financial transaction because it does not require interstate commerce. Additionally, the defendant must know that the transaction involved criminally derived property valued at more than $10,000. The Government must also prove that the property derived from a specified unlawful activity and that the transaction occurred in the United States. Although high profile cases often involve drug cartels, international corporations and the like, §1957 can be used to prosecute someone for using criminally derived proceeds to purchase a vehicle, buy stock, or for simply making a bank deposit.

What are the Possible Penalties for Federal Money Laundering?

A defendant convicted under §1956 faces up to $500,000 in fines or up to 20 years in prison, or both. Under §1957, a conviction carries penalties that include fines up to $250,000 or up to 10 years in prison, or both. In some cases civil penalties are also imposed.

Sentences can be increased for defendants who knew the laundered proceeds derived from an offense involving a controlled substance, acts of violence, weapons, or the sexual exploitation of a child. Defendants who engaged in sophisticated laundering activity or who were in the business of money laundering could also receive higher sentences. Defendants who played minor roles in the offense, or who participated minimally, could receive sentence reductions. Cases vary in complexity and corresponding penalties. 

In July 2019, a former Chicago resident was one of 30 defendants charged in a Chicago-based federal investigation of a money laundering operation involving two Mexican drug cartels. The laundering operation was responsible for moving over $100 million from the United States into Mexico. The former Chicago resident defendant ultimately pleaded guilty and was sentenced to 5 years in prison.

Contact an Experienced Criminal Defense Attorney for Assistance with Your Money Laundering Case Today!