Federal Money Laundering

Congress enacted money laundering laws in order to criminalize the way in which some individuals and businesses attempt to purify or “clean” proceeds from unlawful activities. The law of money laundering attacks the financial transactions of illegally obtained proceeds and not the illegal activity that produced the proceeds. The two actions are separate and generally give rise to different charges.

A person commits money laundering when he performs a financial transaction with knowledge that the property involved came from a particular illegal act. Money laundering also requires an intention to further the illegal act. It should be noted that a person need not actually succeed in completing an illegal transaction to be convicted. An attempted illegal transaction is enough.

A financial transaction is illegal when the person knows the property came from a particular unlawful act and knows the transaction was calculated to hide the character of illegally acquired property. Federal law also makes it illegal to transport or transfer such property from within the country to somewhere outside the country, or vice versa. Those convicted of these crimes face up to 20 years in prison and a fine up to $500,000, or twice the value of the funds involved.

Federal law also makes it illegal to conduct a financial transaction with property obtained from an illegal act with the intent to further the illegal act. A person who engages in such a transaction with the intention of hiding the character, place, or possession of the property may be guilty of money laundering. A conviction will result in a possible prison sentence of 20 years and a fine of up to $500,000, or twice the value of the funds involved.

The term “transaction” simply refers to a transfer that includes selling, buying, or loaning. If a financial institution is involved, the term refers to transfers such as withdrawing, depositing, taking out loans, and generally any other transfer a bank may conduct. The monetary instrument that is used can be currency, or virtually any type of check or security.

Money laundering requires some underlying particular illegal act from which the funds were derived. Included among these acts are crimes involving controlled substances, homicide, arson, certain violent crimes, certain types of fraud, bribery of public officials, trafficking in persons, sexual exploitation of children, an act that constitutes a criminal enterprise, various environmental crimes, and a host of other crimes.

An intent to conceal where property came from may be inferred by evidence produced at trial. However, the evidence of concealment must be substantial. It is not enough to convict simply by showing that illegally acquired funds were spent. Inferences may be drawn from such activities as using a third party to conceal the real owner’s identity, structuring the transaction in a way to avoid attention, exchanging small bills for larger ones, and the creation of sham businesses.

There is an additional statute related to money laundering that makes it illegal for a person to knowingly engage in a financial transaction with property worth more than $10,000 that was the product of a particular illegal act. Generally, the government does not have to show that the defendant was aware the property came from a particular illegal act. A conviction under this statute may result in a sentence of up to 10 years and a fine.

A criminal defense attorney has many options in defending allegations of money laundering. First, the government must prove every element of the crime as charged. For instance, the government must show that the money is tainted (the proceeds of a crime) to prove money laundering has occurred. If the government has no evidence showing that the money is tainted, there can generally be no conviction.

The information provided above is a very general summary of money laundering law at the time this text was prepared. Because this analysis is subject to change depending upon recent cases and legal developments, you should not rely on this summary as legal advice. As with any important legal question, you should always consult a lawyer experienced in federal criminal defense and licensed to practice in your jurisdiction. Our lawyers are licensed to practice in all federal and state courts in Georgia and may practice in other federal courts by special permission.