Federal Criminal Money Laundering Statute (18 USC 1956)

The key federal criminal money laundering statute is 18 USC 1956 which outlaws four kinds of money laundering:

1) Promotional, concealment, structuring and tax evasion;

2) Laundering of the Proceeds (i.e. invest the proceeds transforming it into other assets);

3) Money generated by designated federal, state, and foreign underlying crimes (predicate offenses). In the case of Pasquantino v. US 544 US 349 (2005), defrauding a foreign government (i.e. Canada) of tax revenue was held to be a violation of the federal wire fraud statute (18 USC 1343 i.e. the use of interstate wires, in this case telephone calls, to “effect a scheme to defraud”). This crime of tax evasion in a foreign country may also be a predicate offense for money laundering.

4) Federal criminal money laundering committed or attempted under one or more of 3 jurisdiction conditions:

a) money laundering of proceeds;

b) certain financial transactions;

c) international transfers.

The related companion statue is 18 USC 1957 which prohibits depositing or spending more than $10k of the proceeds from an offense under 18 USC 1956. The penalties are different: violations under 18 USC 1956 are punishable by imprisonment for not more than 20 years, under 18 USC 1957 the maximum penalty is 10 years in prison. In addition the assets/property involved in either case is subject to confiscation.

The criminal misconduct which implicates parties under 18 USC 1956, 1957 my implicate them under other federal criminal statutes including:

RICO: Federal Racketeer Influenced and Corrupt Organization provisions which outlaws acquiring or conducting the affairs of an enterprise whose activities affect interstate or foreign commerce through the patterned commission of a series of federal or state crimes. The maximum penalty is 20 years in jail. Every RICO predicate offense (i.e. underlying crime known as a Specified Unlawful Activity. “SUA”) including the federal crime of terrorism is automatically am 18 USC Section 1956 money laundering predicate offense.

The Travel Act (18 USC 1952) punishes: interstate or foreign travel/the use of interstate or foreign facilities conducted with the intent to distribute the proceeds of other predicate offenses. The maximum penalty is 5 years in jail.

Other related federal statutes include:

1) Bulk cash smuggling;

2) Layering bank deposits to avoid reporting requirements;

3) Failure to comply with federal anti-money laundering provisions;

4) Conducting an unlawful money transmission business.


Comments are closed.