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New Jersey Section 2C:21-27.1 – Criteria for imposition of anti-money laundering profiteering penalty.

New Jersey has some pretty strict laws against money laundering, which is when criminals try to hide the source of their illegal funds to make them look legitimate. One of those laws is Section 2C:21-27.1, which allows prosecutors to go after major money launderers with huge financial penalties on top of any criminal charges.This law is meant to hit big-time money launderers in the wallet, even if they manage to avoid prison time. The penalties can add up to millions of dollars for large-scale operations. So what exactly does the law say and how does it work? Let’s break it down.

What is money laundering?

First, a quick refresher on what money laundering is. Basically, it’s when criminals take money or assets from illegal activities like drug dealing, and then try to disguise where the funds came from. For example, they might:

• Deposit dirty money in small amounts to avoid suspicion
• Use shell companies or fake loans to layer the money
• Invest in legitimate businesses to make the money seem clean

The goal is to hide the criminal origins of the funds so the launderers can spend the money freely, without raising red flags. Money laundering allows criminal enterprises to flourish by making their profits usable.

Overview of 2C:21-27.1

New Jersey’s Section 2C:21-27.1, passed in 1999, specifically targets major money laundering operations. It gives prosecutors the power to impose harsh civil penalties on top of any criminal charges for laundering. The penalties are based on how much illicit money the launderers processed.The law has two main parts:

1. It sets up criteria for when the civil penalties can be applied
2. It provides a formula for calculating the size of the penalties

Meeting the criteria is key – the penalties can only be imposed if prosecutors can show the defendants were engaged in “anti-money laundering profiteering” per the law.

When penalties can be imposed

The civil penalties are meant for major money launderers, not small-time offenders or those who unknowingly facilitated laundering. Prosecutors have to show:

• The defendants were knowingly involved in laundering at least $100,000. That’s a pretty high bar and excludes minor or unwitting participants.
• Their actions were “part of a scheme or course of conduct engaged in” for profit. Again, this targets people who intentionally and repeatedly launder money as a business model.
• The laundered funds came from crimes like drug trafficking, weapons dealing, human trafficking, illegal gambling, counterfeiting, etc. The law aims squarely at serious organized crime.

All three conditions must be met for the penalties to apply. This ensures they only target big-time career money launderers running sizable operations.

How the penalties are calculated

If prosecutors can show the criteria were met, the formula for the penalties is:

• Up to 3 times the amount of money laundered, or
• Up to 3 times the value of the laundered property, plus
• A fine of up to $500,000

So for example, if someone laundered $5 million, they could face penalties of $15 million plus a $500,000 fine. The potential penalties scale up rapidly with the amount laundered.For large operations, the penalties can easily reach millions or tens of millions of dollars on top of any criminal charges. And the law allows prosecutors to aggregate the amounts laundered over time, rather than having to prove a single large transaction.

How the penalties are enforced

The New Jersey Attorney General’s Office handles imposing and collecting the penalties under this law. The office has wide latitude on deciding whether to pursue the penalties in each case.If applied, the penalties become a civil judgment against the defendant. They can then use all the usual civil tools like liens and asset seizure to collect, on top of criminal restitution and fines.The penalties are meant to be paid from the defendant’s personal assets – they can’t be discharged through bankruptcy. The state can revoke or reduce the penalties if defendants don’t have sufficient means to pay them.

Policy goals and effects

The severe financial penalties are intended to serve as a major deterrent to large-scale money laundering operations in New Jersey. The threat of multi-million dollar judgments makes setting up shop there less appealing.By targeting kingpins and major facilitators, the law aims to disrupt the profitability of money laundering. This can potentially reduce not just laundering, but the underlying lucrative criminal activities that generate the dirty money.Critics argue the penalties are disproportionate and predominantly target low-income defendants involved in the drug trade. But supporters say the law provides a valuable tool to undermine organized crime enterprises in the state. Either way, New Jersey’s anti-money laundering profiteering law ups the ante significantly for major laundering operations. Financial penalties of this magnitude can’t be ignored when planning criminal enterprises.So in a nutshell, that’s the how, when and why of New Jersey’s tough anti-money laundering penalties. Large scale launderers beware – get caught in Jersey, and you could be writing some big checks to the state! Let me know if you have any other questions!