Currency Reporting and Money Laundering Flashcards
Currency Reporting Crimes - Bank Secrecy Act
Title II CFTRA (currency and foreign transactions recording):
- Knowingly importing or exporting monetary instruments ($10,000 trigger for reporting to Customs)
- For criminal side, gov. must prove two mental states: knowingly transporting, and that failure to report was willful
-US v. Forty-Seven Thousand Nine Hundred Eighty Dollars in Canadian Currency
- Willfully violating – does not require knowledge of statute/reporting requirement (for civil forfeiture at least)
Civil forfeiture
drafted broadly to reach virtually any property that is related to or involved in the underlying criminal conduct (don’t need to know failure to report is illegal, although that is true for criminal cases)
US v. Bajakajian -
Money not declared was not used for any illicit purpose, so full forfeiture would be excessively harsh
Distinction between criminal forfeiture (in personam) and civil (in rem) and that criminal is usually punishment for an underlying crime (not present here)
Domestic Currency transactions reporting - Ratzlaf v. US (1994)
went to 10 different banks to avoid reporting over 10k - holding - willfully violating applies to illegality of act, not the reporting requirement, conviction overturned (a year later, congress made it clear that knowledge of reporting requirement sufficed)
§ 6050I of IRC
Any person engaged in a trade or business must report transactions >$10,000
-includes law firm fees - US v. Goldberger & Dubin (can’t try to hide client, that person could go to another lawyer)
Money Laundering Control Act
Requires proof of collateral criminal intent. The actor must intend:
1) “to promote the carrying on of specified unlawful activity”; or (2) to commit tax evasion or fraud.
• Alternatively, the actor must know that the financial transaction is designed: (1) to “conceal or disguise the nature, location, source, ownership, or control of the proceeds of specified unlawful activity”; or (2) to avoid federal or state currency reporting requirements, including those imposed by the Bank Secrecy Act.
US v. Tencer
chiropractor’s false insurance claims. somewhat broad definition of intent to conceal. here, used different address.
Prima Facie Case for money launderinf
government must prove that the defendant 1) conducted or attempted to conduct a financial transaction, 2) which the defendant knew involved the proceeds of a specified unlawful activity, 3) with the intent to conceal or disguise the nature, location, source, ownership, or control of the proceeds of unlawful activity
US v. Campbell - mens rea?
willful blindness fulfills knowledge requirement
US v. Johnson - definition of “proceeds of specified unlawful activity”
intent can be proven from surrounding circumstances.
Holding: court affirms conviction b/c “intent to promote…unlawful activity” satisfied by paying mortgage since he used his “aura” of legitimacy to further his ponzi scheme
- but transfer of funds not necessarily violation of
US v. Kennedy
o All that is required to violate § 1956 is a transaction meeting the statutory criteria that takes place after the underlying crime has been completed. Thus, the central inquiry in a money laundering charge is determining when the predicate crime became a “completed” offense
Anti-Bribery Part of FCPA
makes it an illegal practice, “in order to assist . . . in obtaining or retaining business,” for a covered person corruptly to give or offer “anything of value” to any foreign official, politician, political party, or agent for the purpose of influencing an official act or omission, inducing such a person to influence a foreign government decision, or to secure “any improper advantage.
what counts as a thing of value?
“anything of value” – no de minimis exception (usually not enforced for things like coffee or splitting a cab)
mens read for FCPA
willful blindness or conscious disregard suffice
definition of business purpose
US v. Kay - if connection between gift and acquisition/retention of business
when is a payment corrupt
US v. Kozeny - Payment made to induce official to misuse position – What of extortion – only imminent threat of physical harm
affirmative defenses for firms:
• Two affirmative defenses: where action was lawful under laws of foreign country; or reasonable and bonafide expenditures such as travel and lodging expenses, incurred by or on behalf of a covered foreign person, which are directly related either to the promotion, demonstration, or explanation of products or services; or to the execution or performance of a contract with a foreign government or agency
Accounting provisions
only for public companies. includes books and records part and internal controls part
what is instrumentality of a foreign government?
US v. Esquenazi (2014) - Court defines as: An “instrumentality” under section 78dd-2(h)(2)(A) of the FCPA is an entity controlled by the govern-ment of a foreign country that performs a function the controlling government treats as its own.
an entity must 1. be under the control or dominion of the government to qualify as an “instrumentality” within the FCPA’s meaning. 2. doing the business of the government
what is instrumentality of a foreign government?
US v. Esquenazi (2014) - Court defines as: An “instrumentality” under section 78dd-2(h)(2)(A) of the FCPA is an entity controlled by the govern-ment of a foreign country that performs a function the controlling government treats as its own.
an entity must 1. be under the control or dominion of the government to qualify as an “instrumentality” within the FCPA’s meaning. 2. doing the business of the government
successor liability
DOJ says - determined Based upon all of the facts and circumstances, as represented by Requestor, the Department does not presently intend to take any enforcement action with respect to pre-acquisition bribery Seller or the Target Company may have committed
sanctions for money laundering/bribery
• US v. Pinnick
o Issue: should conduct alleged in other counts of same indictment be considered “relevant conduct” under sentencing guidelines?
some acts proceeded others by months, meaning they are clearly definable
Holding: ok for dismissed charges to be considered - if similar enough
Apprendi v. NJ
Any fact, other than a prior conviction, that increases the maximum penalty for a crime must be submitted to a jury and proven beyond a reasonable doubt by the prosecution.
Blakey v. Washington
invalidated state sentencing guideline that allowed judges to give more than standard sentencing range
US v. Booker
invalidated statute that made sentencing guidelines mandatory
US v. Martin - sentencing
7 day sentence found to be unreasonable. § 3553(a)(6) does not permit the district court to compare Martin’s sentence with the “sentence” of a man whom a jury acquitted of criminal conduct, however groundless that acquittal may seem in light of the evidence in this record.
