FEDERAL MONEY LAUNDERING
Money Laundering in layman's terms
Money laundering usually involves investing criminally derived money in a legitimate, or what appears to be a legitimate, business. The money this "business" makes enterprise is laundered or "clean" money. Most money laundering operations also involve tax evasion, tax fraud and “creative” accounting.
The Federal Money Laundering Statutes
18 U.S.C. § 1956(a) defines three types of criminal conduct: domestic money laundering transactions (§ 1956(a)(1)); international money laundering transactions (§ 1956(a)(2)); and undercover "sting" money laundering transactions (§ 1956(a)(3)).
What the Government must prove
To be criminally culpable under 18 U.S.C. § 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 the four specific intents discussed below, and the property must in fact be derived from a specified unlawful activity.
The actual source of the funds must be one of the specified forms of criminal activity identified by the statute, in 18 U.S.C. § 1956(c)(7), or those incorporated by reference from the RICO statute (18 U.S.C. § 1961(1)).
To prove a violation of § 1956(a)(1), the Government must prove, either by direct or circumstantial evidence, that the defendant knew that the property involved was the proceeds of any felony under State, Federal or foreign law. The Government need not show that the defendant knew the specific crime from which the proceeds were derived; only that the defendant knew that the property was illegally derived in some way. See § 1956(c)(1).
The Government must also prove that the defendant initiated or concluded, or participated in initiating or concluding, a financial transaction. A "transaction" is defined in § 1956(c)(3) as a purchase, sale, loan, pledge, gift, transfer, delivery, other disposition, and 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.
Remember, in order for the Government to prove their case, the prosecution must prove beyond a reasonable doubt that the defendant intentionally and knowingly attempted to conceal the origin or destination of money derived from crime. So lack of evidence of any criminal intent is a viable defense strategy, as are lack of evidence of the defendant's intent to hide or launder any money and, additionally, lack of evidence that the money in question constituted acutal proceeds of a crime.