New Jersey Section 2C:21-27.6 – Collection and distribution.

New Jersey Section 2C:21-27.6 – Collection and Distribution

Overview of Anti-Money Laundering Laws

New Jersey’s anti-money laundering laws were enacted in 1999 to combat organized crime and terrorism by making it harder for criminals to enjoy the profits of illegal activities. The laws impose strict requirements on businesses to report suspicious financial transactions and criminalize various forms of money laundering.

Some key provisions include:

• Section 2C:21-23 – Makes it a crime to engage in transactions involving criminal property or the proceeds of criminal activity.
• Section 2C:21-25 – Makes it a crime to transport or possess property known to be derived from criminal activity.
• Section 2C:21-26 – Makes it a crime to conduct a transaction knowing it will conceal criminal activity or disguise criminal property.
• Section 2C:21-27 – Requires certain businesses to file reports on cash transactions over $10,000.

Violations are graded as crimes ranging from 3rd to 1st degree based on the value of the criminal property involved. Fines can reach up to $500,000 on top of imprisonment.

Anti-Money Laundering Penalties – 2C:21-27.2

A major component of the anti-money laundering laws is Section 2C:21-27.2, which allows courts to impose additional civil penalties called “anti-money laundering profiteering penalties.”

These penalties can be up to 3 times the value of the criminal property involved in a money laundering offense. So if a defendant laundered $500,000, they could face up to a $1.5 million civil penalty on top of any criminal punishment.

The purpose is to take the profit out of money laundering and other organized criminal activity. The penalties are imposed by the court following conviction of an underlying money laundering offense.

Collection and Distribution – 2C:21-27.6

Section 2C:21-27.6 deals with collecting anti-money laundering penalties and distributing the funds obtained.

It provides that all penalties assessed under 2C:21-27.2 must be docketed and collected as judgments by the court. The penalties can be collected using all available remedies for the collection of debts.

The penalties collected must be distributed as follows:

• 10% to the Office of the Attorney General
• 10% to the Office of the Prosecutor
• 80% to the treasury of the county in which the offense occurred

This ensures that law enforcement agencies receive funding to continue investigating and prosecuting money laundering and organized crime. The bulk of the funds go to the county to support local initiatives.

Defenses

Those facing money laundering charges may argue they did not know the property involved was derived from criminal activity. But Section 2C:21-25 makes it a crime to simply possess property known to be derived from criminal activity, even without intent to conceal or launder it.

Defendants can also argue the property does not meet the statutory definition of “criminal property.” The state must prove beyond a reasonable doubt that the funds were derived from criminal activity such as drug trafficking, prostitution, corruption, gambling, or trafficking in stolen property.

In some cases, defendants may have an innocent explanation for suspicious transactions. Or they may argue the transactions were not designed to conceal criminal activity but had other legitimate purposes. The prosecution bears the burden of proving intent to conceal beyond a reasonable doubt.

Policy Considerations

While tough anti-money laundering laws aim to fight organized crime, critics argue they can also ensnare innocent conduct and impose excessive penalties. For example, requiring routine reporting on cash transactions over $10,000 could affect innocent businesses dealing largely in cash.

Civil penalties up to 3 times the amount involved may also seem excessive in some cases. Opponents argue criminal prosecution and forfeiture of the laundered property sufficiently punishes offenders without additional civil fines.

But legislators determined the laws were necessary to deter sophisticated money laundering operations. The penalties aim to eliminate the profit motive and make illegal activity less lucrative. Supporters say the laws provide useful tools for law enforcement without preventing lawful use of cash.

Conclusion

New Jersey’s anti-money laundering laws provide prosecutors with potent weapons to dismantle organized criminal enterprises by making it harder to enjoy the profits. Section 2C:21-27.6 ensures penalties imposed under the laws will be efficiently collected and distributed to continue funding enforcement efforts. Defense lawyers can challenge the laws as overbroad or excessive in some applications. But the comprehensive statutes were enacted to aggressively deter money laundering which authorities determined to be a serious threat.