Common methods include disguising the source of the proceeds; changing the form of the proceeds; or moving the proceeds to a place where the proceeds are less likely to attract attention.Federal statutes proscribe money laundering. The first federal Anti-Money Laundering statute was enacted in 1986 with the passage of the Money Laundering Control Act (“MLCA”), codified at 18 U.S.C. §§ 1956 and 1957. The MLCA was amended in 1988 by the Anti-Drug Abuse Act of 1988 (Pub. L. 100-690), which amended § 1956 to add a provision making it a crime to conduct or attempt to conduct a financial transaction involving the proceeds of criminal activity with the intent to violate § 7201 (attempted tax evasion) or § 7206 (false tax return) of the Internal Revenue Code of 1986.

In particular, we will discuss: The charges involving the “international” prong of the money laundering statute, a rarely used charge; The charges under the BSA alleging failures to file Reports of Foreign Bank and Financial Account, or FBARs – a charge which has become a staple in the government’s decades-long enforcement campaign against international tax evasion and undisclosed foreign accounts held by all sorts of U.S. taxpayers; and How the indictment’s allegations conform with the recent regulatory emphasis on the alleged use of high-end real estate in the U.S. to launder illicit funds earned abroad.The “International” Prong of the Money Laundering Statute: Unusual Breadth Count Two of the indictment charges conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). This is the only money laundering charge in the indictment.

Opinion Offers Narrow View of “Safe Harbor” Provision for Defense Attorneys Accepting Tainted Funds from ClientsSecond in Series of Two Blog Posts Pertaining to Attorneys Convicted of Money LaunderingOn April 25, the U.S. Court of Appeals for the Fourth Circuit affirmed the conviction of Baltimore defense attorney Kenneth Ravenell (“Ravenell”) for money laundering conspiracy, in violation of 18 U.S.C. § 1956(h). Ravenell had proceeded to trial and had been acquitted of six charges, including conspiracy to distribute narcotics. However, he was convicted on the single count of money laundering conspiracy, based on his alleged assistance to two drug dealer clients, and received a sentence of 57 months of imprisonment.The Ravenell opinion (“Opinion”) involves a splintered set of findings across the three-judge panel. It involves findings on important technical issues pertaining to the statute of limitations and the use of the conscious avoidance/willful blindness theory of prosecution, which is often critical in cases involving third-party professionals such as lawyers, accountants, and real estate agents. But, more importantly, it involves a discussion of when defense attorneys may accept illegally-obtained proceeds from their clients as payment for legal representation, and if such funds ever may be provided through third parties. As we will discuss, the Fourth Circuit interpreted very narrowl

Again emphasizing the international aspect of the indictments, the press release stated that “[s]ixteen of the 19 defendants were arrested . . . . in New York and Los Angeles, as well as Hungary, Bulgaria, Germany, and Israel[,]” and that “[t]he arrests followed a multi-year investigative effort by federal and international law enforcement agencies to target multimillion-dollar fraud and money laundering schemes perpetrated by a transnational organized crime network.” The four indictments are lengthy and we will discuss only one of them, in order to focus on the potentially broad jurisdictional reach of the “international” money laundering provision under 18 U.S.C. § 1956(a)(2).One of the four indictments alleges that Mr. Stanislav Nazarov, an Israeli citizen, generated hundreds of thousands of dollars in proceeds from various fraudulent schemes and engaged in international money laundering. Aside from some forfeiture counts and a charge under 18 U.S.C. § 2, the general federal aiding and abetting statute, the indictment charges Mr. Nazarov with a single count of money laundering conspiracy, in violation of 18 U.S.C. § 1956(h), based upon his alleged efforts to violate two prongs of the “international” money laundering provisions under Section 1956(a)(2), as well as the “sting” provision under Section 1956(a)(3) and the separate “spending” money laundering statute, 18 U.S.C. § 1957.

Following an eight day trial, Terry Millender was convicted of wire fraud, conspiracy to commit wire fraud, filing false tax returns and aiding and assisting in the filing of false returns, obstruction of justice, and various money laundering charges. As to the money laundering charges, he was convicted of committing, or conspiring to commit, money laundering with an intent to “promote” the underlying criminal activity, in violation of 18 U.S.C. §1956(a)(1)(A)(i), or an intent to “conceal” the illegal proceeds derived from that activity, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). He also was convicted under the “international” prong of the money laundering statute, in violation of 18 U.S.C. §1956(a)(2)(A), of conducting a cross-border financial transaction with the intent to promote a specified unlawful activity (as we have blogged, this is a unique money laundering provision because it does not require the use of previously-obtained illegal proceeds in the transaction), and under the “spending” money laundering statute, in violation of 18 U.S.C. §1957, which requires a transaction involving over $10,000 of illegal funds.

In a recent example of such a prosecution, the DOJ charged two former Bolivian government officials and three U.S. citizens with money laundering violations for their roles in a bribery scheme to secure a Bolivian government contract for a U.S. company. As alleged in Criminal Complaints filed in the U.S. District Court for the Southern District of Florida, the defendants conspired to commit money laundering under 18 U.S.C. § 1956(h), with the underlying offenses including violations of the FCPA and bribery offenses against a foreign nation.While the FCPA is the most well-known U.S. anti-corruption statute, its anti-bribery provisions generally apply only to U.S. citizens or corporations, limiting the DOJ’s ability to bring FCPA charges against foreign individuals and corporations involved in bribery schemes. In an effort to aggressively pursue anti-corruption enforcement, U.S. prosecutors have turned to a set of statutes with more expansive jurisdictional reach to target corruption around the world where there is a U.S. nexus. Anti-money laundering (AML) statutes are among the most important tools available to prosecutors to reach corruption outside the U.S., and prosecutors can also extend the reach of the FCPA by supplementing or replacing FCPA charges with charges under the RICO Act, the Travel Act, and the wire fraud statute, among other statutes.This aggressive use of non-FCPA statutes in corruption cases is

In August 2019, one of those individuals pled guilty solely to one count of conspiracy to launder money.Even though the allegations involved the payment of $4 million in bribes, the plea did not include the FCPA charge.The number of individuals charged with money laundering and pleading guilty only to money laundering charges when the allegations relate to bribery and corruption misconduct is growing.To pursue these convictions, the DOJ is charging individuals with violating the MLCA (18 U.S.C. §§ 1956 and 1957), which prohibits conducting financial transactions involving funds generated by a specified unlawful activity (SUA), defined by statute to encompass a large range of illicit activities.Section 1956(a)(1) prohibits conducting or attempting to conduct a financial transaction involving the proceeds of an SUA, knowing that the property involved represents the proceeds of an SUA.

The Money Laundering Statutes: A “Supplement” to the FCPA? The case and sentencing highlight the use of the money laundering statutes, 18 U.S.C. § 1956 and § 1957, to prosecute foreign officials for receiving bribes, conduct which is not actually punishable under the Foreign Corrupt Practices Act of 1977 (FCPA), 15 U.S.C. § 78dd-1, et seq. The FCPA generally prohibits individuals and businesses from paying bribes to foreign officials to assist in obtaining or retaining business.

arketplace.In December 2016, Chi faced an arrest orchestrated by the FBI in San Francisco, painting a vivid illustration of the significance and complexity of ITAR compliance. The charges brought against him stemmed from engaging in monetary transactions derived from the bribery of a public official in South Korea, a clear violation of arms regulations.alleged misinterpretation of South Korean lawChi's relentless argument, however, revolved around the assertion that the indictment failed to sufficiently allege a violation of the federal bribery statute. Despite his strong plea, the district court unyieldingly dismissed Chi's motion, resulting in his conviction on one count. Undeterred, Chi fervently pursued an appeal, honing in on the misinterpretation of South Korean law and challenging the purported lack of evidence supporting his conviction.Deep within the legal discourse surrounding this case, the court meticulously delved into the definition of "specified unlawful activity" under 18 U.S.C. § 1956, highlighting the pivotal role it played in determining Chi's fate. Echoing previous landmark cases, such as United States v. Lazarenko and United States v. Chao Fan Xu, the court confidently asserted that the foreign law violated by Chi fell squarely within the categories outlined in § 1956(c)(7)(B). This decisive stance ultimately affirmed Chi's conviction and ITAR compliance obligations."ordinary, contemporary, common meaning" of wordsTo arrive at this outcome, the court adamantly advocated for utilizing the "ordinary, contemporary, common meaning" of words when interpreting statutes, a principle that has been endorsed by the highest levels of the judicial system. Perrin v. United States, Taylor v. United States, and Scheidler v. National Organization for Women, Inc. stand as resolute testaments to the influential power of this approach. Thus, the court wholeheartedly contended that § 1956(c)(7)(B) should be evaluated through this lens as well, refuting Chi's argument that "bribery

For example, changing the AML program rules to allow for greater focus on identified priorities without changing suspicious activity report (SAR) thresholds may limit the effect of the new AML program rules."Are this ANPRM's Notice's three proposed core elements and objectives of an "effective and reasonably designed" AML program appropriate? Should FinCEN make any changes to the three proposed elements of an "effective and reasonably designed" AML program in a future notice of proposed rulemaking?"Consider whether the duty to manage AML risks is nuanced enough to allow financial institutions to de-prioritize or even ignore some low priority risks without incurring liability under federal criminal law, 18 USC §§ 1956 and 1957. Those statutes criminalize transactions that are known to involve the proceeds of crime.