Defenses for Money Laundering

White collar crime refers to a subset of criminal law that addresses crimes committed by people in business and government. Generally speaking, these crimes are non-violent in nature and involve motives of financial gain. Similar to other crimes, a white collar crime conviction can result in considerably serious legal penalties.

Money laundering is a specific white collar crime in which money is made from illegal means, and made look as though it has been obtained legally and legitimately. It involves engaging in financial transactions in an attempt to hide the true nature of the money that is being laundered, or the original source of the money. The United States was the first country to criminalize money laundering in 1986.

It is important to note that the law can reach beyond U.S. borders if both of the following elements are met:

• The actual money laundering was committed by a U.S. citizen, or by a non-U.S. citizen who conducted at least part of the offense in the United States; and
• The money laundering transaction totals more than $10,000.

Money laundering is frequently associated with other criminal activities, such as racketeering or embezzlement. Racketeering, broadly defined, is the operation of an illegal business or racket. Criminal rackets may include:

• The importation and sale of illegal drugs;
• Prostitution rings;
• Gambling; and
• Other activities that are associated with money laundering or bribery.

The term embezzlement refers to another type of white collar crime, occurring when a person who is entrusted to handle the finances of another person or business illegally takes that money for their own personal use. Embezzlement is most common in situations which involve an employee who has access to their employer’s checks, cash, and/or bank account. An example of this would be if an accountant or bookkeeper illegally writes a check to themselves, steals cash, or withdraws money from business bank accounts that do not belong to them.

What Are The Legal Penalties For Money Laundering?

In terms of potential legal punishments for money laundering, those who are found guilty may face any or all of the following:

• Criminal sentence of up to 20 years in a federal prison facility;
• A criminal penalty of up to $500,000 in fines; and/or
• A civil penalty lawsuit filed by the government for the value of funds or property that was involved in money laundering.

Money laundering is considered to be a criminal offense, but the following parties may also be held civilly liable:

• Individuals: To reiterate, the government can file a civil penalty lawsuit for the value of funds or property laundered against individuals; and/or
• Financial Institutions: The Department of Justice has the unique power, granted by money laundering laws, to pursue civil lawsuits against financial institutions although they may not have been charged with the crime of money laundering. However, this is only true as long as the lawsuit is based on allegations that it was employees who laundered money, and seeks recovery only in the amount of money that was laundered.

Are There Any Defenses Available For Being Accused Of Money Laundering?

Money laundering is considered to be a specific intent crime. Specific Intent refers to your state of mind at the time you committed the crime, and requires not only committing an unlawful act but also doing it with an additional subjective intent or objective.

There are two levels of intent that will be listed in the statute defining the crime. Specific intent crimes are generally indicated by the use of such words as intentionally, knowingly, purposely, and/or willfully. Generally speaking, if you did not act with the required intent then you cannot be convicted of a specific crime. An example of this would be if your actions had been part of a harmless prank.

Theft crimes are specific intent crimes because not only must you intentionally commit an act of taking of another person’s property, you must also act with the intent to permanently deprive the owner of their property.

The main difference between specific and general intent crimes would be the “actus reus” and “mens rea” components of each crime. Specific intent crimes require the perpetrator to have a desire to commit the act, as well as an intent to achieve a specific result. Alternatively, general intent crimes only require the defendant to commit an act which is considered to be criminal according to the law. What this means is that you can be convicted of a general intent crime simply by committing the crime.

Generally speaking, all of the defenses that are available for specific intent crimes can be used to defend against money laundering charges. Some of the most commonly used defenses include:

• Absence Of Intent To Commit A Crime: To reiterate, most crimes require intent to commit the crime. In terms of money laundering specifically, people who are accountants, bankers, or others who handle large amounts of money are frequently charged with money laundering without even knowing that they committed a crime. If you are able to prove that you were unaware that the money obtained was illegal, there is no way that you could have had the necessary intent to commit money laundering;
• Duress: Duress occurs when a person truly believes that there will be some danger or harm if they do not participate in the crime. In money laundering cases, criminals commonly force accountants or bankers to launder illegally obtained money by threatening to harm them or their loved ones. Under such circumstances, you will most likely have a successful duress defense; and
• Insufficient Evidence: A criminal charge may be dismissed if there is insufficient evidence to prosecute the accused of the crime. In money laundering cases specifically, an intention to prevent illegally-obtained funds from being traced to its origin is required for a conviction. Additionally, a conviction requires proving that the money that was laundered came from a specific illegal activity. If one of these two elements are missing, there is a possibility that an insufficient evidence defense would be successful.

What Else Should I Know About White Collar Crimes In General?

There are a number of government enforcement agencies that conduct investigations in order to determine whether individuals are committing white-collar crimes. Corporations also use internal investigators, attorneys, or the SEC to investigate as to whether any directors, management, or individuals associated with the corporation are committing criminal activities.

When white-collar crimes involve the sale of securities and/or stocks, the SEC and State Attorney General’s investigate and enforce proceedings against those suspected to be involved in insider trading. Additionally, many corporations have regular internal investigations and audits in order to investigate a wide variety of alleged wrongdoing.

Agents of different Federal agencies that are often involved in white collar crime investigations include:

• The Federal Bureau of Investigation (“F.B.I.”);
• Internal Revenue Services (“I.R.S.”);
• Securities and Exchange Commission (“S.E.C.”); and
• The U.S. Treasury.

An investigation may be ordered even if you are not suspected of committing a white collar crime. An example of this would be how your business could be investigated because it was mentioned by a witness or informant involved in an ongoing trial. You may also be subject to investigation if your business:

• Received a subpoena in a grand jury trial in order to produce business records, or to supply a witness for the trial;
• Was presented with a valid search and seizure warrant in order to obtain documents;
• Has been contacted by a government agent to question an employee; and/or
• Recently received a subject or target letter, stating that an investigation is necessary.

Do I Need An Attorney For Money Laundering?

If you are being accused of money laundering, you should consult with an experienced and local criminal lawyer as soon as possible. A criminal defense lawyer can determine what defenses may be available to you under your state’s specific criminal laws. Finally, an attorney will also be able to represent you in court, as needed.