Money Laundering Flashcards
Four primary elements of a money laundering violation under 18 U.S.C. §§1956 and 1957
- Act
- Proceeds
- Knowledge
- Intent
Act
- An “Act” for money laundering purposes is a financial transaction that affects interstate or foreign commerce.
- Any disposition involving the movement of funds including: hand to hand, wire, courier, disposition (buying items or investing), mail
- Any disposition involving title transfer – Transfer title to home,
business, car, boat, plane, etc - In order for the financial transaction to constitute an act for money laundering purposes, the SA must prove that the transaction affects interstate or foreign commerce.
Act - need to prove disposition of funds that impact commerce.
Describe impact on commerce/when it’s not.
- Impacts commerce when money is used to purchase something, could be a car, could be gas. Or when deposited into a bank, investment ect.
- Doesn’t impact commerce if its buried in their backyard or handed off to the other person and that person physically holds onto it without entering it into commerce.
- Safety deposit box - Considered an act for money laundering
Proceeds (element 2)
a. Do the funds represent the proceeds of SUA (specified unlawful activity)?
b. Are the funds represented to be the proceeds of SUA?
c. Are the funds financial gains that are criminally derived?
d. The SA need only prove that the proceeds in question derived from criminal behavior that constitutes one or more of the SUA’s.
The mover of the funds must intend one of the following
a. That the funds or property in question be used to promote a
criminal enterprise that is in fact a SUA,
b. To conceal the ownership, source, or control of the funds or
property in question,
c. To avoid reporting requirements under state or federal law,
d. To commit in tax fraud
Bob gave Hank $50,000 and Bob told Hank that the money came from an illegal chicken rustling operation. Chicken rustling is a felony, which Hank and Bob knew, but not a Specified Unlawful Activity. Bob asked Hank to travel from Chicago to Lewes, Delaware to pay the owner of a chicken processing plant where the chickens were processed. Bob did so. Did Bob commit Money Laundering under § 1956(a)(1)?
No, there’s no SUA
Example: Joe and Gary want to expand their crystal meth distribution business from Brunswick to Savannah. In order to build a bigger, more efficient lab, Joe buys a 5-acre tract of land in a remote section of west Georgia. Joe buys the land with money he borrowed from Joe’s brother, Ted, who is a successful investment banker and who knows nothing his brother’s criminal activity.
Have either Joe and/or Gary violated 18 U.S.C. §1956(a)(1)?
No, dirty money wasn’t used
Once they begin to pay off the loan with dirty money - then it’s money laundering.
When can the use of clean money be used to charge money laundering?
- International money laundering 1956(a)(2)
Bob is a cocaine dealer. He made $400,000 last month selling cocaine. He also runs an auto parts store. He uses his business account to launder the drug proceeds. In fact, he has a courier specifically for this purpose. Every month he has his courier take a $300,000 business check to his parts supplier in Turkey. The reason Bob does this is to conceal the source of the funds. The courier knows nothing of the operation and believes he is delivering a payment on previously delivered auto parts. Is Bob guilty of money laundering? Is the courier?
Yes - International - concealment of SUA funds.
Bob is a photo journalist. Bob takes photos of political
figures while engaged in compromising enterprises. He then
provides the photos to the political figure and asks for a donation to the “Bob Fund.” Extortion is a felony, but not a SUA (for this example). Through his hard work, the “Bob Fund” has grown and Bob is concerned that if he puts the money into his savings account, the bank will report the deposit to the feds. So Bob takes $125,000 from the “Bob Fund” and travels to Argentina where he places the funds into a new account. Bob failed to report the movement of the funds when he left the country. He did not know about the CMIR rule.
Yes - international - avoid reporting requirement
Darius gave $50,000 to Mike and told Mike to deliver the money to Skip in Oregon. Darius also told Mike that the money was to be used to buy more northern California grown marijuana. The money came from previous marijuana sales (SUA) and Mike knew this. What would be the most appropriate charge in this case?
18 U.S.C. §1956(a)(1) domestic money laundering – promotion
Apollo had $130,000 from the sale of marijuana (SUA) that he wanted to use to buy a car. He did not want to deposit the money into a bank account because he knew the bank would generate a currency transaction report. He decided to fly to Rome, Italy (with the money) so he could buy a car there. What money laundering crime has Apollo committed?
18 U.S.C. §1956(a)(2) international money laundering – avoid reporting requirement.
Currency Transaction Reports
All domestic financial institutions are required to file a Currency Transaction Report (CTR) with U.S Treasury for all currency transactions in excess of $10,000 conducted by the institution
Currency & Monetary Instruments Reporting (CMIR) Elements
- Anyone
- Who transports or causes the physical transportation of monetary instruments
- In excess on 10k
- At one time in or out of the US
- Must file a report with CBP at time of arrival or departure.
CMIR Transporting
Transports or causes the transportation
- Physically carried the monetary instrument across the border
- or directing another to physically carry it across.
