Promotional money laundering is an illegal offense codified in 18 U.S. Code § 1956. It occurs when someone knowingly engages in money laundering that is used for the purpose of promoting (aiding, assisting, continuing, sustaining) another unlawful activity. It is not necessary that the participants know exactly what illegal activity is being used to generate the money nor must they know exactly what the illegal activity is.
It is simply enough that the defendants know that the source of the money is illegal and that the promoted activity the money is being used to sustain is also unlawful. Additionally, there are three forms of promotional money laundering. They are financial transactions, international transmissions, and stings.
Financial Transactions Explained
The promotional money laundering offense of financial transactions as found in 18 U.S. Code § 1956 reads:
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-
(A)(i) with the intent to promote the carrying on of specified unlawful activity
The simplest way to understand financial transactions is to break it down into its two elements; that they be financial and that they be transactions. So, for a promotional money laundering offense to be a financial transaction it must have funds involved, and it must contain a form of distribution of proceeds received from a crime. Additionally, financial transactions are also defined by their predicate offenses. Both the original crime and the promoted crime are categorized in State, Federal, and Foreign laws. This is because the funds must come from a crime within the category of predicate offenses.
International Transmissions Explained
The second type of promotional money laundering offenses are international transmissions which are codified in 18 U.S. Code § 1956 and states:
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-
(A) with the intent to promote the carrying on 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 promote criminal activity. As in financial transactions, the predicate offenses must fall into the categories of what constitutes a criminal predicate offense.
The last type of promotional money laundering offenses are sting, which are codified in 18 U.S. Code § 1956 and states:
3. Whoever, with the intent-
(A) to promote the carrying on 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. Once again, this promotional money laundering offense is limited by the categories of predicate offenses.
What the Prosecution Has to Prove
To be found guilty of promotional money laundering 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 Promotional 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 promotional money laundering.
Sentencing for Promotional 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, the judge may impose a fine no greater than $500,000 or twice the value of the funds, and the government may claim forfeiture of all property in proximity to the criminal activity.
The Kushner Law Group has had years of experience defending and protecting the rights of our clients in both New York State and the Federal courts. We have won successful results on behalf of our clients and are here to help guide you through the prosecutorial process. To learn more about the Kushner Law Group, please click here. If you have been charged with any form of promotional money laundering, call us now for a free consultation at (718) 504-1440.