Concealment Money Laundering 18 U.S. Code § 1956

Concealment money laundering is the knowing transaction or attempted transaction of illegal funds to “disguise the nature, location, the source, the ownership, or the control of the proceeds of specified unlawful activity”. Regulation of this crime can be found in 18 U.S. Code § 1956. To best understand this law, it is easiest to analyze the law its elements. The first element, “knowing,” means that the defendant is aware that both the source and the destination of the funds are a form of illegal activity. The defendant doesn’t need to know the exact activity if they are aware that it is illegal. Likewise, the second element, a “transaction”, refers to any distribution of illegal funds. The final element of concealment money laundering determines which category the offense will fall under. These categories are financial transactions, international transmissions, and stings.

Financial Transactions Explained

The first category of concealment money laundering, financial transactions, as found in 18 U.S. Code § 1956 reads:

Section 1956(a)(1)(B)(i):

1. Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity-

B. knowing that the transaction is designed in whole or in part-

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity

The simplest way to understand the elements of a financial transactions offense is to break it down into its two basic parts, that it be financial, and that it be a transaction. Here, the word financial means that it must have funds involved, and the word transaction means that it must contain a form of distribution of proceeds received from crime. Additionally, financial transactions are also defined by their predicate offenses. The predicate offenses, both the original crime and the concealed crime are categorized in State, Federal, and Foreign law. This is because the funds must come from a crime that falls within the defined categories of criminal predicate offenses.

International Transmissions Explained

The second type of concealment money laundering offense are international transmissions, which are found in 18 U.S. Code § 1956 which reads:

Section 1956(a)(2)(B)(i):

2. Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States-

(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part-

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity

International transmissions are easily defined as any action or attempted action to transmit funds from somewhere inside the U.S. to somewhere outside the U.S., or from somewhere outside the U.S. to somewhere inside the U.S. to conceal criminal activity. Like financial transactions, the predicate offenses must fall into the categories of what constitutes a criminal predicate offense.

Stings Explained

The last type of promotional money laundering offense are stings which when defined by 18 U.S. Code § 1956 states:

Section 1956(a)(3)(B):

3. Whoever, with the intent-

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

To keep it brief, stings are simply a variation of financial transactions in which law enforcement has manipulated someone into believing that funds are from a criminal source and are being used to promote another criminal activity when they are not. So, a concealment offense becomes classified as a sting when law enforcement officers collude with someone to attempt to cover another criminal activity. Once again, this form of money laundering offense is limited by the categories of predicate criminal offenses.

What the Prosecution Has to Prove

To be found guilty of concealment money laundering in any form the prosecution must prove beyond a reasonable doubt that:

1. The defendant knew the funds were profits of illegal criminal activity; and
2. The defendant participated in a financial transaction of said funds; or
3. The defendant had intent to participate in a financial transaction of said funds; and
4. The funds were used for the concealment of another illegal criminal activity

If the prosecution proves these elements beyond a reasonable doubt the defendant will be found guilty. If the prosecution does not prove these elements beyond a reasonable doubt, then the defendant will be found not guilty.

Possible Defenses for Concealment Money Laundering

When formulating a defense against this charge, there are a few strategies to keep in mind:

1. Proving that the defendant did not know the funds were coming from an illegal activity. One of the elements of this crime is that the defendant knew the funds were both coming from and used for illegal activity. If one can demonstrate with supporting evidence that the defendant was ignorant of this fact; they cannot be guilty.

2. Proving that the defendant did not have an intent to participate in a money laundering financial transaction. If one can prove with supporting evidence that the defendant did not have intent to complete the action or could not have completed the action, then they cannot be guilty.

3. Demonstrating a lack of evidence that the funds came from a crime. If one can prove that the funds did not come from an illegal activity, then it is not money laundering.

Sentencing for Concealment Money Laundering

In addition to sentencing guidelines, judges also look at other factors when deciding sentencing including:

1. The defendant’s personal history
2. Criminal history or lack of one
3. The details of the crime

Generally, money laundering is punishable by no more than 20 years. Additionally, all funds are subject to seizure, and the judge may impose a fine no greater than $500,000 or twice the value of the funds. Additionally, the government may claim forfeiture of all property in proximity to the criminal activity.

Money laundering charges are serious offenses that require proactive and aggressive legal representation. The Kushner Law Group has had years of experience protecting the rights of our clients in both New York State and the Federal courts. We have won successful results and are here to help guide you through the prosecutorial process. To learn more about the Kushner Law Group, click here. Call us now for a free consultation at (718) 504-1440.