18 U.S.C. § 1956 – Money laundering

18 U.S.C. § 1956 – Money Laundering

Money laundering involves hiding the source of illegal profits so they look like they came from legal activity. It allows criminals to use dirty money while avoiding suspicion.

Federal law 18 U.S.C. § 1956 is the main statute making money laundering a crime in the U.S. This law imposes harsh penalties for laundering proceeds from a list of specified unlawful activities.

This article provides an overview of the federal money laundering statute. It covers the key elements prosecutors must prove, penalties you face, and potential defenses.

What Makes Money Laundering Illegal?

Under 18 U.S.C. § 1956, it’s illegal to conduct a financial transaction involving profits from certain crimes knowing that the money is dirty. The law targets transactions meant to:

• Promote illegal activity
• Conceal the source of the funds
• Avoid reporting requirements

To prove money laundering, prosecutors must show:

1. You knew the money came from criminal activity
2. You engaged in a financial transaction with the dirty money
3. You intended to conceal the source of funds, promote illegal acts, or avoid reporting

The crime that generated the money has to be one of over 200 specified unlawful activities in the law. This includes drug trafficking, fraud, organized crime, and many more.

What Counts as a Financial Transaction?

A financial transaction under the statute involves:

• Transferring, delivering, moving, or exchanging funds
• Using a financial institution engaged in interstate commerce
• Using the mail or any interstate carrier

It covers all kinds of money movement like deposits, withdrawals, transfers between accounts, and currency exchanges. Real estate closings and car purchases can also qualify.

Penalties for Money Laundering

Money laundering penalties under 18 U.S.C. § 1956 can include:

• Up to 20 years in prison
• Fines up to $500,000 or twice the amount laundered
• Supervised release
• Asset forfeiture

Harsher sentences apply if done on behalf of organized crime, drug cartels, or while violating another U.S. law.

International Money Laundering

Under 18 U.S.C. § 1956, laundering money abroad or moving funds internationally can still lead to U.S. prosecution if:

• The laundering involves foreign and U.S. banks
• A U.S. citizen participated in the scheme
• Part of the activity happened inside the United States

The Patriot Act expanded the global reach of American money laundering laws after 9/11.

Using the Bank Secrecy Act

Prosecutors often combine money laundering charges with Bank Secrecy Act violations under 31 U.S.C. § 5324. This law requires reporting transactions over $10,000 to the government.

Intentionally structuring deposits to avoid triggering reports can show knowledge of illegal activity. It can also constitute an independent crime.

Undercover Sting Operations

Law enforcement frequently relies on undercover sting operations to build money laundering cases. This involves undercover agents or informants posing as criminals with illicit funds.

If the target engages in financial transactions to hide the supposed source of money, they can be arrested for laundering. But strong entrapment defenses may apply.

Parallel Construction

Prosecutors sometimes use evidence from secret sources like NSA wiretapping in laundering cases. But they conceal this through “parallel construction” – fabricating an alternative explanation for how evidence was obtained.

As a defense, you can demand prosecutors reveal the true source of their evidence through discovery.

Defending Against Money Laundering Charges

There are various strategies for fighting federal money laundering allegations, like:

• No knowledge funds were from illegal acts
• No intent to conceal source or promote illegal activity
• Challenging if the transaction counts as “financial”
• Questioning if the money really came from a “specified” crime
• Contesting the tracing of funds as illicit

An attorney can also scrutinize if there were any constitutional violations in how evidence was gathered.

Avoiding Harsh Sentencing

Even if you plead guilty or are convicted at trial, all is not lost. Your defense lawyer can advocate for the lowest possible sentence.

Strategies include:

• Highlighting mitigating personal circumstances
• Objecting to sentencing enhancements
• Providing evidence of assistance to prosecutors
• Requesting a downward departure

Alternatives like deferred prosecution or pretrial diversion may also be available in some cases.

Takeaways

Money laundering charges should always be taken seriously given the stiff penalties. But working with an experienced attorney to exploit flaws in the prosecution’s case, raise doubts, or pursue a favorable plea deal can help achieve the best possible result.