Money Laundering/Asset Forfeiture Flashcards
What is title 18 USC 1956(a)(1)
Makes it a crime to knowingly conduct or attempt to conduct a FINANCIAL TRANSACTION with the proceeds of specified unlawful activity with the purpose or specific INTENT to
- Promote the carrying on of specified unlawful activity (SUA)
- conceal or disguise the nature, location, source, ownerships or control of the proceeds (concealment = layering)
- avoid a currency transaction reporting requirement (structuring)
- evade taxes
sentencing for 1956(a)(1)
20 year felony, up to 500k fine
Title 18 USC 1957 (“spending statute”)
Proceeds of Specified Unlawful Activity
→ Know property is criminally derived
→ MONETARY TRANSACTION (involving financial institution)
→ With a value greater than $10,000 for a single transaction
sentencing for 1957 violation
10-year felony, up to 2x amount of crim-derived property
asset forfeiture
taking of property by the gov. without compensation b/c it was used in a manner contrary to the law
Proceeds of Crime theory
“fruits of the crime” directly or indirectly traceable to illegal activity - can only take what is directly traceable; can take interest, dividends, appreciation in value, etc.
Facilitation of Crime Theory
“makes the crime less difficult” substantial connection
Enterprise Theory
forfeit interest or control of any enterprise that a person has conducted or operated in conjunction w/ criminal offense
“Enterprise” includes any partnership, corporation, association or other legal entity if enterprise is involved in RACKETEERING activity**
civil forfeiture
“in rem” (against the property) property is the defendant, and no criminal charge against owner is necessary
criminal forfeiture
brought as part of criminal prosecution of a defendant
“in personam” - against persons action & requires that the gov indict/charges & have to be found guilty
administrative forfeiture
taking asset without going through traditional judicial process
Still need probable cause, and a seizure warrant; make proper notification (60 days); 35 days for property owner to file a claim and admin. Forfeiture stops.
person does not need to be charged
What can you seize with admin forfeiture?
any amount of $$, personal property valued at $500k or less, includes cars, boats, guns, etc.; hauling conveyances of unlimited value
originator
initiator of funds transfer - person or business
beneficiary
ultimate party to receive the funds
fedwire
owned and operated by federal reserve and is primary domestic electronic funds transfer system
Funds Transfer Rule
from BSA- applies to all funds transfer over $3,000; requires banks to get certain info depending on role in transfer - generally must get name and address of originator, date of payment order, account # for originator
What does Fedwire do?
handles both message transfer traffic & actual funds transfers
FIs have correspondent accounts at Fed. Reserve that allow access to Fedwire - only domestic FI can have accounts at Fed. Reserve
Transfers are processed in real time, not batched meaning wire goes from inception to completion with no significant delays
When tracing wire transfers, what documents should be obtained and analyzed:
Originators account statement - monthly deposit acct statement shows amount of funds transferred out
Beneficiary’s account statement - monthly deposit statement will show funds wired in