Money Laundering

Money Laundering is the term for a white collar financial crime where money obtained from criminal activity is concealed from the government and reintroduced into the economy as purported legitimate money. Money Laundering is basically washing dirty money or making dirty money appear to be clean or legitimate money.

The United States Laundering Crime Act of 1986 modernized federal statutes penalizing Money Laundering. Individual states often have their own Money Laundering laws. Foreign governments also have Money Laundering acts and often cooperate with the United States government to combat international Money Laundering.

There are three distinct steps used to launder money. The first is the placement of the money, where the money is put into a legitimate business or financial institution. The next step is layering the money, where it is mixed with the legitimate business' or financial institution's money. The final step is the integration of the money, where it is reintroduced into the economy, thereby laundered or washed of its illegal source.

The federal government must prove these elements to convict a person of Money Laundering:

  • the defendant knew the money or property involved in the Money Laundering transaction represented proceeds of illegal activity;
  • the defendant participated in the financial transaction; and
  • the defendant had knowledge that the transaction was aimed at concealing the nature and source of the illegal proceeds.

Examples of Money Laundering include:

  • Buying a house or business, using cash obtained from selling illegal drugs or other criminal activity and then quickly selling the house or business;
  • Transferring proceeds from drug sales to a seemingly unconnected person who then purchases race horses. The couple then purchases real estate from the sale of the horses.
  • Purchasing cashier's checks or money orders (in small denominations) using illegally obtained money to make various purchases;
  • Going to Las Vegas with illegally obtained money; buying casino chips and pretending to gamble; then cashing in the casino chips giving the appearance that the money was won at the casino;
  • Using offshore banks to conceal illegally sourced money;
  • Transferring money outside of the United States without declaring it; and
  • Using shell corporations to hide illegal criminal activities.

The punishments for Money Laundering are harsh: up to 20 years in federal prison for each count, asset seizure, and fines up to $500,000 or the amount of money laundered, whichever is greater. There is also the penalty for the underlying crime, such as drug sales.

California Law

In California, Money Laundering is prosecuted under California Penal Code section 186.10. In order to convict someone of Money Laundering, the prosecutor must prove a person or a defendant (a) conducted or attempted to conduct a financial transaction, or more than one transaction within seven days, through a financial institution, of more than $5000, or (b) must conduct a transaction or transactions of a total exceeding $25,000 within a 30-day period, through one or more banks or other financial institutions.

The transaction or transactions must be conducted by the defendant with the intent to promote, manage or facilitate criminal activity, or be conducted with the knowledge that the money was from criminal activity (directly or indirectly).The financial transactions required for Money Laundering include: deposits; loans; withdrawals; bank transfers (including wire transfers); and exchange of currency. If a case involves an attorney accepting a fee for representing a client in a criminal case, the prosecutor must prove the above-mentioned elements and in addition prove the money received by the attorney was done with the intent to conceal or disguise the source of the money or the nature of the criminal activity.

Money Laundering can be prosecuted as a misdemeanor punishable by up to a year in county jail or as a felony with up to three years in state prison. A person convicted of money laundering in California may also be fined the greater of the amount of money laundered or up to $250,000. Prosecutors can add enhancements to the criminal charges for transactions exceeding $50,000. These penalties may add up to an additional four years in prison, depending on the amount of money laundered.

Experienced Criminal Defense Attorneys

Most Money Laundering charges are generally filed in connection with illegal narcotics or other drug crimes, as well as with organized crime and gang activities. Law Enforcement investigators or detectives will often seek out, question, and even charge people who may not even know they are part of a Money Laundering scheme. If you are under investigation or are being charged with Money Laundering, contact Los Angeles Criminal Defense Attorneys to assist you with the investigation and fight your criminal charges.