Money laundering refers to any organized network of activities intended to “convert” money obtained from illicit activities so that it appears to be money gotten from lawful sources. Money laundering is frequently the hallmark of organized crime syndicates. Criminal cartels make use of “front” businesses that appear lawful in order to construct a new “paper trail” that allows money obtained by crime to be used for general purchases. Money laundering charges often involve conspiracy, racketeering, and other federal crimes intended to thwart organized criminal activity.
YouTube Special Feature
The three stages of money laundering from Jeffrey Robinson’s 1995 BBC-Tv film based on his book, “The Laundrymen.”
Money Laundering Laws
Both states and the federal government have money laundering laws on the books. Federal money laundering laws are intended to criminalize the illicit activities of large-scale criminal conspiracies that might be involved in other crimes, such as counterfeiting, drug trafficking, and human trafficking.
Money Laundering Crimes & Charges
Federal money laundering laws recognize a number of unlawful activities:
- Knowingly representing the proceeds from any unlawful act as lawful and attempting to conduct any financial transaction with said proceeds, with the intent of promoting such unlawful activity, concealing the nature of the proceeds, or avoiding reporting requirements.
- Transporting, transmitting, or transferring any monetary instruments or funds throughout the United States to promote unlawful activity, conceal the nature of criminal proceeds or avoid financial reporting requirements.
- Making false representations about criminal proceeds in order to effect any of the outcomes above, including concealing the nature of criminal proceeds, avoiding reporting requirements, or promoting unlawful activities.
In effect, the laws provide for punishment for any individual who engages in any type of financial transaction, whether the transfer of property, use of a financial institution, or transport of any proceeds, if that individual knows or should know that the proceeds arise from any illegal activity.
Money Laundering Punishment
Penalties for money laundering differ based on the specifics of the crime. Speaking generally, large fines and jail time are possible. Fines can range up to $500,000 or be based upon the value of the property involved in a money laundering transaction. Imprisonment for general money laundering crimes can range up to twenty years.
Money Laundering Sentencing Guidelines
The basic outlines of money laundering sentencing guidelines are provided for in the United States Code. The maximum sentences possible are based upon the specific type of violation and may be influenced by the amount of money involved in an illicit transaction.
Generally speaking, the maximum sentences provided for in any act of federal money laundering include a sentence of up to twenty years in prison and a fine. The maximum fine is generally set at $500,000. However, the fine may be adjusted to be as much as twice the value of the currency or other monetary instruments represented in the illicit activity.
Money Laundering Statute of Limitations
According to the strictures of federal law, no one can be prosecuted, be brought to trial or be subject to legal penalty for any offense that is not capital unless information is instituted or the person has been indicted within five years of committing the offense. (See 18 USC 3282)
Money Laundering Cases
Federal money laundering cases generally take place within the context of a larger racketeering case governed by the RICO Act. Money laundering is typically only one aspect of a pattern of organized crime which may be nationwide or international. That being the case, money laundering is often the lesser offense in a pattern of crimes that can result in lifetime imprisonment. Here are some notable major cases:
- The biggest U.S. money laundering case of all time commenced in mid-2013 as the U.S. filed an indictment against Liberty Reserve, based in Costa Rica, alleging that it was involved in laundering more than $6 billion for criminal cartels worldwide. Liberty Reserve was shut down as a result of the allegations. (Christian Science Monitor)
- Until recently, the largest and most comprehensive worldwide money laundering scheme of all time was believed to be that headed by South American drug lord Pablo Escobar. Colombian drug lord Escobar was felled through an undercover money laundering operation headed by the U.S. Department of Justice throughout the 1980s. (West Point)
Money Laundering Quick Links & References
- Definition of Money Laundering & Statutes at Cornell’s Legal Information Institute
- The Money Laundering Control Act of 1986 and Its Implications (in PDF Format)
- An Overview of Money Laundering Cases from Congressional Research Service (PDF)
- Pitfalls of Federal Money Laundering Prosecution and Defense from the NACDL
- Money Laundering Information from the United States Department of the Treasury
Money Laundering Laws by State
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming