Money Laundering

Whether in Texas or anywhere in the country, pursuant to 18 U.S.C. §1956, it is unlawful to knowingly engage in a financial transaction or to transport finances, that represent the proceeds of some unlawful activity (i.e. proceeds from various state and federal crimes including narcotics trafficking, Medicare fraud and embezzlement, among others), while knowing that the financial transaction or transportation you are doing is designed to conceal or disguise the nature, location, source, ownership, or control of the money.

The term “proceeds” is very broad, and includes any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity; “proceeds” is not limited to the profits made from the unlawful activity.

Alternatively, a defendant can also be charged with a crime under 18 U.S.C. §1957, which prohibits engaging, or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000. This statute carries a lesser punishment of maximum 10 year imprisonment.

The difference between the two statutes and the difference in the penalties is that under 18 U.S.C. §1957, the Government is not required to prove that the defendant knew the finances were proceeds from an unlawful activity. Thus, a prosecutor will seek a conviction under this section of the statute if they cannot prove under 18 U.S.C. §1956 that the defendant knew the proceeds were from an unlawful activity. Warning: If you are engaging in a financial transaction and you think the source of the funds could possibly be from an illegal activity, even though you may not have done the illegal activity, you are committing a crime simply by participating in that transaction!

Possible Punishment for Federal Money Laundering

In 1987, the United States Sentencing Commission established the Uniform Sentencing Guidelines which proscribe a range of punishment for each of the defendant’s convictions based on the type of crime and the defendant’s previous criminal history. One of the goals of the Sentencing Commission was to bring about tougher sentencing for white collar crimes like Money Laundering. Even the most minor white collar felonies can require incarceration under the Guidelines. These Guidelines were mandatory until 2005 when the Supreme Court’s held in U.S. v. Booker that they were only advisory in nature and federal judges have discretion to impose a punishment outside of the Guideline range. Additionally, the Guideline range is limited by the statutory maximum punishment that the legislature has authorized. A judge may not impose a punishment above the statutory maximum or minimum regardless of what the Guideline calculation is.

The Guidelines assign a numerical offense level (ranging from numbers one to forty- three) for every federal offense. Level one is the lowest level of punishment, and level forty-three is the most severe (i.e., a level forty three results in life imprisonment). Every defendant is also given a criminal history number, which depending on how much criminal activity the defendant has had in the past, can increase the range of punishment. If the defendant is convicted of the underlying crime from which the laundered money is from, then the base offense level for the money laundering conviction and for the substantive conviction are the same. However, if the defendant was not convicted of the underlying crime, then the base offense level for the laundering charges is 10 if convicted of 18 U.S.C. §1956, and 9 if convicted of 18 U.S.C. §1957. The offense level is increased based on Guidelines §2B1.1 depending on the value of the amount of money laundered. If the defendant is not convicted of the underlying crime from which the funds were laundered, but the defendant knew or believed that any of the laundered funds were the proceeds of, or were intended to promote an offense involving the manufacture, importation, or distribution of a controlled substance or a listed chemical; a crime of violence; or an offense involving firearms, explosives, national security, or the sexual exploitation of a minor, the base offense level is increased by six (6) levels. Additionally, the defendant is subject to a fine of $500,000 and their assets may also be frozen and are subject to forfeiture. A conviction under §1956 carries a maximum sentence of imprisonment of twenty (20) years, and under §1957 the maximum is ten (10) years.

However, the Guidelines also provide for a number of adjustments, called “Departures” that can either increase or decrease an offense level. This means that a judge can tailor a particular sentence to a defendant based on the factors set forth in 18 U.S.C. §3553(a). It is important to hire an attorney who can argue to the judge the myriad of reasons why the defendant should not be sentenced within the guideline range, and qualifies for a lower sentence. Since the advent of Booker, the court is obligated to consider the individual circumstances of each particular case and then render a sentence “sufficient, but not greater than necessary” for an individual defendant, both in light of the sentencing guidelines and the factors set forth in 18 U.S.C. §3553(a). For an Federal Money Laundering attorney to be successful in reducing a sentence, it is important to be familiar with the judge and his particular sentencing philosophy, to determine which evidence and arguments should be pursued in sentencing. It is also necessary to review the probation officer’s Presentencing Report and any Sentencing Memorandums submitted by the prosecutor. We can bring in an outside mitigation specialist who prepares his own mitigation report which presents all the reasons why the defendant qualifies for a reduced sentence. We sometimes use a private investigator to research any questionable information contained in the Presentence Report or the Sentencing Memorandum.