Money laundering is the concealment of the original source, amount, or final destination of money obtained through unlawful acts, also referred to as “ill-gotten gains” or “dirty” money, and typically involves a series of transactions that would appear as legitimate conduct, such as an routine commercial transaction between businesses or banking transfers.
The purpose of money laundering is to make it seem as if the money was legitimately earned, i.e. to wash the money clean and separate it from “the dirt” of its source, e.g. the unlawful criminal acts, so a person may claim and spend profits from their criminal activity openly, without fear of facing legal consequences. Ill-gotten gains can come from a variety of sources, the most common of which include drug trafficking, fraud, and embezzlement. Money laundering may also be undertaken in an attempt to hide the original source of money from financial auditors, forensic accountants, and criminal investigators.
The Money Laundering Control Act of 1986 made money laundering a federal crime that includes hefty fines and potentially harsh terms of imprisonment.
The act gave federal prosecutors two types of money laundering charges to deploy against persons it suspected of engaging or attempted to engage in money laundering, which are codified in Title 18 of the United States Code as § 1956 and § 1957.
Section 1956 makes it unlawful for any person to engage or attempt to engage in a financial transaction when that person knows property involved in the transaction is profit from an unlawful activity, and
Simply, federal prosecutors can two theories under section 1956, a “promotion theory” under the first prong, or the “concealment theory” under the second prong.
Section 1957 makes it unlawful for any person to “knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000.”
For simplicity, money laundering may be broken down into three discrete steps to take illegal income and make it appear as income generated from a legitimate source:
In sum, the government must prove beyond a reasonable doubt that an individual engaged in this sort of activity under the “promotion theory,” the “concealment theory,” or under 1957.
The Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA), and the Department of Justice (DOJ) are the most likely agencies investigating persons suspected of money laundering and its related crimes, as these three are the main law enforcement agencies of the federal government.
Considering that this charge applies transactions with financial institutions, you would most often see banks and other financial institutions involved in the investigation.
Other federal agencies likely investigating money laundering include the Internal Revenue Service (IRS), Securities Exchange Commission (SEC), Federal Trade Commission (FTC), the Federal Deposit Insurance Corporation (FDIC), and the United States Secret Service (USSS) for cases involving counterfeiting.
A person indicted for money laundering would likely look are greater punishments than charges money laundering alone, because they are commonly accompanied in an indictment with other serious charges, such as, for example, a charge for the underlying unlawful activity that generated the money in the first place.
Lastly, it is crucial to remember that federal investigators generally spend months and sometimes years investigating money laundering cases before indictment, which may make the government’s evidence and case against seem overwhelming and unbeatable.
The punishment for money laundering most often includes an assessment of heavy fines and a term of imprisonment, but sentencing varies with each case’s unique set of facts, the presiding judge, and factors considered under the federal sentencing guidelines, which you can read more about here.
Yes, money laundering charges under both sections 1956 and 1957 are federal felonies.
20 years is the maximum term of imprisonment under section 1956 money laundering.
$500,000 or double the value of the money laundered, whichever is greater, is the maximum fine under section 1957 money laundering.
10 years is the maximum term of imprisonment under section 1957 money laundering.
Every sentence in a federal cases is based on the federal sentencing guidelines, which considers a multitude of factors, such as prior criminal history, use of a gun, or position of trust, to calculate a recommended range that the federal judge may use as a guide for sentencing, however the presiding judge ultimately reserves final discretion at sentencing. Thus, as long as the judge provides a reasonable basis for their decision on record, the judge may make what is called a “departure from the guidelines” and sentence the defendant to a term of imprisonment outside the recommended range. You can learn more about the sentencing under the federal sentencing guidelines here.
Yes, a person indicted with money laundering charges will be required to pay restitution to his victims. This means that the government can require you to pay back all the money others lost as a result of your money laundering if you are convicted. In fact, the DOJ has a section based in Washington, D.C. called the Money Laundering and Asset Recovery Section (MLARS) that is entirely dedicated to coordinating the collection of assets and victim restitution worldwide.
Yes, a person indicted with money laundering charges would be subject to asset seizure and forfeiture. This means that the government can lawfully take any of your property, including your money, cars, and other valuables so long as it proves you used the assets to facilitate the money laundering, or the assets were “proceeds” of laundering money.
At the same time, seizures and forfeiture depends on the charges alleged in the indictment and the unique facts of your case. As mentioned above, the charges and facts alleged in the indictment shape the scope of the entire criminal proceeding, including assets subject to pre-trial seizures and final forfeiture as part of sentencing, if convicted. You can learn more about the sentencing under the federal sentencing guidelines here.
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You should only speak with law enforcement investigator regarding anything related to fraud, COVID-19 fraud, or any other related crime after you have spoken to a criminal defense lawyer. Period.
A common question from people involved in a criminal investigation is at what point can they finally clear their name and share their part of the story.
You have probably heard investigators, prosecutors, and others taking the situation out of context, bending the truth, and misunderstanding what actually happened. They are relying on people who are lying, and the whole situation is outrageous and humiliating for you.
You should know that the Fifth Amendment exists to protect anyone accused of a crime from incriminating themselves, and the truth is it takes only one split-second mistake to get unnecessarily tied up in a prolonged criminal investigation that will place a heavy financial and time-consuming burden for you and loved ones. Do not go swimming with sharks alone and without a cage.
You need to speak with a fraud or COVID-19 fraud defense attorney to obtain sound legal advice before you speak with federal fraud investigators, even if you think you have done nothing wrong.
You should contact a defense lawyer that has decades of experience handling criminal investigations before you engage with investigators. Balancing cooperation and protecting your constitutional rights and liberties requires a defense attorney that knows how to handle federal investigators.
If you have been contacted or anticipate contact from federal fraud or COVID-19 fraud investigators, then you should contact and speak with a federal fraud and COVID-19 fraud defense lawyer to protect yourself, your freedom, and financial stability. You will not be able to talk yourself out of the crosshairs – you’ll only be wound up in a web of investigation tactics.
You need a fraud defense lawyer who knows what they’re doing and has a proven track record of experience defending federal fraud cases. Schiffer law firm has over four decades of experience defending clients involved in federal criminal investigations and clients accused of federal crimes. The fraud defense lawyers at Schiffer law firm know how to handle federal fraud cases from first contact by investigators to overturning wrongful convictions on appeal.
Schiffer law firm attorneys has and continues to defend people needing fraud defense attorneys nationwide. Nobody is too small, and nowhere is too far. If you think you need to speak to a fraud defense attorney, give us a call today.