Tax Evasion & Money Laundering (Criminal Conduct)

The US Attorney Criminal Resource Manual Section 2101 references 18 USC 1956 (a) which defines three types of criminal conduct:

1) Domestic Money Laundering transactions (18 USC 1956 (a) (1);

2) International Money Laundering transactions (18 USC 1956 (a) (2);

3) Undercover “Sting” Money Laundering Transaction (18 USC 1956 (a) (3).

To be criminally culpable under 18 USC 1956 (a) (1) a defendant must conduct or attempt to conduct a FINANCIAL TRANSACTION, knowing that the property involved in the financial transaction represents the proceeds of some unlawful activity with one of four SPECIFIC INTENTS, and the property must in fact be derived from a SPECIFIED UNLAWFUL ACTIVITY (see 18 USC 1956 (c) (7) for
the source of funds from a criminal activity or under the RICO statute (18 USC 1961(1).

TRANSACTION/FINANCIAL TRANSACTION

A TRANSACTION is defined under 18 USC 1956 (c) (3) as a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition. With respect to a financial institution, a deposit, withdrawal, transfer between accounts, loan, exchange of currency, extension of credit, purchase or sale, safe-deposit box, or any other payment, transfer or delivery by, through, or to a financial institution.

A FINANCIAL TRANSACTION is defined under 18 USC 1956 (c) (4) as a transaction which affects interstate or foreign commerce and:

1) Involves the movement of funds by wire or other means;

2) Involves the use of a monetary instrument, or

3) Involves the transfer of title to real property, a vehicle, a vessel, or an aircraft; or

4) Involves the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce.

SPECIFIC INTENTS

In conducting the financial transaction, the defendant must have acted with one of the following FOUR SPECIFIC INTENTS:

1) Intent to promote the carrying on of specified unlawful activity (18 USC 1956 (a) (1) (A) (i);

2) INTENT TO ENGAGE IN TAX EVASION OR TAX FRAUD (18 USC 1956 (a) (1) (A) (ii);

3) Knowledge that the transaction was designed to conceal or disguise the nature, location, source, ownership or control of proceeds, of the specified unlawful activity (18 USC 1956 (a) (1) (B) (i)

4) Knowledge that the transaction was designed to avoid a transaction reporting requirement under federal or state law. Examples include: Currency Transaction Reports ( 31 USC 5313), Currency and Monetary Instrument Reports (31 USC from 5316) or 26 USC 6050 I (Internal Revenue Service Form 8300).

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