Hit shows like Ozark, Breaking Bad, and Better Call Saul – among many other crime-based tv shows and movies over the years – have centered on the concept of money laundering. Fans of these types of shows know the basic drill with money laundering: a person might gain a lot of funds from criminal activity – which could include narcotics trafficking, embezzlement, fraud, or any other number of crimes – but then that person has the problem of being able to store and spend that money without attracting the attention of civil and criminal law enforcement, who might otherwise be wondering where all the said funds came from and then “follow the money” to uncover the underlying criminal activity.
With that basic concept in mind, it is critical to understand that money laundering itself is a criminal act, in addition to and on top of whatever other criminal activity might have resulted in the accumulation of funds that are then laundered. Both California state and federal law impose criminal penalties on money laundering, and state and federal law enforcers and prosecutors devote significant resources to investigating and charging money laundering, which can include numerous different actors within the process, including financial professionals and institutions, and who may have little to no connection with the alleged underlying criminal activity.
The Federal Money Laundering Statute
The federal money laundering statute is found at 18 USC 1956, which provides for the imposition of severe punishments on defendants, including up to 20 years in prison and/or $500,000 in fines or or twice the value of the funds at issue in the money laundering action, whichever is greater.
There are three primary types of money laundering actions outlawed by 18 USC 1956. First, a defendant may be found guilty of money laundering for engaging in a financial transaction involving the proceeds of criminal activity where the intent of the financial transaction was either to: 1) further the criminal activity; 2) to avoid tax reporting requirements (i.e. tax evasion); 3) to conceal or disguise the nature, location, source, ownership or control of proceeds of the specified unlawful activity; or 4) to avoid a transaction reporting requirement under state or federal law.
Second, a defendant may also be found guilty of money laundering for transmitting, transporting, or transferring funds or monetary instruments (or attempting to do so) either into the United States or out of the United States for any of the same four intents as listed above.
The difference between these first two types of money laundering is that, with the first, there is the requirement of a financial transaction, while, for the second, the requirement is the transfer, transport, or transmission of funds into or out of the United States. With both of these types of money laundering, there is a requirement that the defendant had knowledge that the funds or monetary instruments at issue were the result of unlawful activity.
Third, a defendant may be found guilty of money laundering as part of an undercover “sting” operation where the defendant believed the funds were the result of unlawful activity (even if that is not actually the case) and engages in or attempts to engage in a financial transaction to conceal or disguise the nature, location, source, ownership, or control or to avoid a transaction reporting requirement under state or federal law.
California’s Money Laundering Statute
California has two primary money laundering statutes: 1) Penal Code section 186.10, which relates to activities regarding proceeds of all types of criminal activities; and 2) California Health and Safety Code section 11370.9, which relates to activities regarding proceeds funds obtained from drug crimes.
Pursuant to Penal Code section 186.10, a defendant may be found guilty of money laundering when that person conducts or attempts to conduct a financial transaction over certain financial thresholds with either: 1) the specific intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on of any criminal activity, or 2) the knowledge that the monetary instruments represents the proceeds of, or is derived directly or indirectly from the proceeds of criminal activity.
A defendant found guilty of violating this provision faces up to one year imprisonment in county jail and a fine of up to $250,000 or twice the value of the property transacted, whichever is greater. If the value of the transaction is more than $50,000 but less than $150,000, the prison term may be increased by a year. If the value of the transaction is more than $150,000 but less than $1,000,000, the prison term may be increased by two years. If the value of the transaction is more than $1,000,000 but less than $2,500,000, the prison term may be increased by three years. If the value of the transaction is more than $2,500,000, the prison term may be increased by four years.
Pursuant to California Health and Safety Code section 11370.9, it is a crime for any person knowingly to receive or acquire proceeds, or engage in a transaction involving proceeds, known to be derived from any violation of specified drug crimes with the intent to conceal or disguise or aid in concealing or disguising the nature, location, ownership, control, or source of the proceeds or to avoid a transaction reporting requirement under state or federal law. A violation of this section can result in imprisonment for up to 5 years as well as a fine of up to $250,000 or twice the value of the property transacted, whichever is greater.
Common Defenses Used in Money Laundering Cases
As with any crime, it is the burden of prosecutors to prove each element of a criminal act beyond a reasonable doubt. An experienced money laundering defense attorney will work with you and examine the facts to assert a robust defense in your money laundering investigation and/or prosecution, as well to minimize the consequences, which may involve working towards a plea deal and/or cooperation agreement.
Common defenses that might come into play in a money laundering investigation or prosecution include:
- You acted without the requisite knowledge that the funds or monetary instruments at issue were the product of an unlawful activity
- You acted under duress
- The funds or monetary instruments were not in fact the result of an unlawful activity
- You acted without the requisite intent to commit any of the required actions in a money laundering charge (e.g., you were not attempting to conceal the nature of funds, to avoid transaction reporting requirements, etc.)
Contact a California White Collar Defense Attorney Today
Whether you have already been charged with a crime in federal or state court, have been approached by law enforcement or an employer with questions regarding criminal activity, or are concerned about potential criminal ramifications of an action that you may have participated in or even simply been aware of, it is important to seek out experienced criminal defense counsel at the earliest possible moment to discuss your issues in a confidential environment and develop strategies and approaches to minimize your risk. The first steps one takes in responding to a potential criminal enforcement matter are often the most critical, and our attorneys have the experience and skills to counsel and defend you throughout the process to work towards an outcome that defends your freedom, financial interests, and reputation. Contact our office to speak with an experienced federal or state court criminal defense attorney regarding your situation today.
