Money laundering is a serious financial crime in Massachusetts that involves concealing sources of money that are gained through criminal activity and made to look like legitimate income. Money laundering in Massachusetts and other states is often related to racketeering, which is a form of organized crime. It also is related in some cases to drug trafficking, insider trading and tax evasion.
The easiest way to understand money laundering is to take money obtained from an illegal source and make it appear it came from a legal source. The purpose of the crime is to hide where the money came from, which is almost always illegal activity. If the money can be shown to be clean, banks will accept the funds and not be suspicious.
Money launderers usually channel illegal money through many intermediaries and accounts throughout the country and world. This may include depositing funds in a bank, but this has risk because banks must report large withdrawals and deposits to the IRS. Money laundering also may involve a legal business or shell company that looks real and may even work in legitimate businesses. But the shell company is just a front for criminal activity. The shell company makes deposits of the dirty money into its business bank account and makes fake invoices and receipts to make it look like real business.
Money laundering was made a federal crime in 1986 with the Money Laundering Control Act.
Massachusetts Laws and Penalties
The federal money laundering statute applies to all monies that are derived from criminal activity, including violations of the RICO Act, drug trafficking, murder, tax evasion, human trafficking, bribery and bank fraud, among other serious federal crimes. To be charged with money laundering, you must have knowledge the money originated from criminal activity, but the state and federal governments do not need to prove knowledge of a specific crime.
The US government must prove that you had intent to carry on illegal criminal activity, to commit tax evasion or fraud, to hide the real source of the money or to avoid reporting requirements for transactions of large amounts under state or federal law.
Below are the common punishments for money laundering under federal law:
- Prison: Money laundering is almost always charged as a federal offense. But in some states, you may be charged with a misdemeanor. A misdemeanor charge can result in a year in jail, while a felony conviction can result in a year or more in federal prison. If the money laundering was part of a large criminal enterprise, you can get a prison sentence up to 35 years or more.
- Fines: The financial penalties can be very high for a money laundering conviction. Misdemeanor convictions can involve fines of a few thousand dollars. But a federal conviction for money laundering can get you a fine of up to $500,000 or double the amount of money that was laundered in the illegal activity.
- Probation: You can get probation for money laundering, typically one to three years. During the time on probation, you must meet strict conditions, such as reporting regularly to your probation officer, taking random drugs tests and not committing any crimes.
It is important to note that you can be charged with more than a single money laundering count. If you, for example, laundered money in an illegal scheme for a year and made illegal transactions each month, you could be charged with the crime 12 times or more.
Massachusetts Money Laundering Defenses
Money laundering is a crime of intent, so potential defenses will hinge upon your intent. Common defenses are:
- Lack of intent to commit crime: It is possible if you are an accountant, banker or other who deals with large amounts of money to be charged with money laundering and be unaware you committed a crime. If you can show that you did not know the money being handled was illegal, there is no way the prosecution can prove intent.
- Duress: This can be a valid defense if you truly thought there would be harm or danger to you if you did not participate in money laundering. It is possible to be forced as an accountant or banker to illegally launder money by having harm threatened to themselves or loved ones.
- Lack of evidence: As in any criminal case, a money laundering charge can be dismissed if there is insufficient evidence to prosecute. In a money laundering case, it is required for the prosecution to prove money was illegally obtained to be traced to the origin for a conviction to stick. A conviction also requires prosecutors to prove the illegal funds came from criminal activity.
Massachusetts Statute of Limitations
18 USC 3282 states you cannot be brought to trial or subject to legal penalty for any offense that does not have capital punishment as punishment, if the prosecution does not occur within five years of committing the offense.
Massachusetts Money Laundering Cases
- 10 Charged in Cocaine Ring That Brought Drugs Into MA from Puerto Rico — 10 suspects are facing federal drug and money laundering charges for their alleged roles in an illegal crime ring that was moving large quantities of drugs from Puerto Rico to Massachusetts, including the cities of Worcester, Taunton and Raynham. An indictment against the defendants was opened last week after seven were placed under arrest by federal officers.
- Lawrence MA Man Pleads Guilty to Money Laundering Drug Money — A man from Massachusetts pleaded guilty last week in federal court in Boston for selling heroin, fentanyl and oxycodone and laundering the money he obtained from the sales. Johnny Urena, 30, faces 40 years in federal prison and supervised release for life for the alleged crimes. He sold oxycodone, heroin and fentanyl and then took the money and funneled them into various bank accounts to conceal the nature of the funds.
- Man From Cyprus MA pleads guilty to money laundering — Esam Sakkal, 40, pleaded guilty to a single count of money laundering conspiracy and two counts of laundering monetary instruments last month. In June 2017, Sakkal and his brother were indicted after they met with US undercover law enforcement posing as drug gang members who had a money laundering role from drug sales.