on work together to establish an effective punishment system.Ultimately, the District Court ruled against the defendants, concluding that the Treasury Department regulation does indeed qualify as a "law" for the purposes of the federal smuggling statute. The court based its decision on various precedents, including interpretations of other sections of the U.S. code and different interpretations of the "contrary to law" provision by other circuit courts. In essence, the court determined that all statutes and agency-promulgated regulations should be considered "laws" for the purposes of the federal smuggling statute, and thus the regulation in question fits this definition. As a result, the motion to dismiss was denied.UNITED STATES V CHI-BRIBERY OF A PUBLIC OFFICIALIn the case of United States v. Chi, the focus is on the conviction of Heon-Cheol Chi, a prominent researcher and director at the Korea Institute of Geoscience and Mineral Resources (KIGAM). Chi faced six counts of violating 18 U.S.C. § 1957 for his involvement in soliciting and receiving payments from two seismometer manufacturers. These payments were made in exchange for Chi's influence in ensuring that KIGAM purchased their products. The FBI initiated an investigation after Chi requested the companies to route the payments through a U.S. bank account. Chi contended that the district court misinterpreted the definition of "bribery of a public official." However, the Court of Appeals determined that the South Korean statute, which prohibits public officials from accepting bribes, could indeed be classified as an offense involving "bribery of a public official." Additionally, the Court of Appeals concluded that there was sufficient evidence to support Chi's conviction, ultimately affirming it.WASHINGTON V UNITED STATES DEPARTMENT OF STATE-3-D PRINTED FIREARMSThe case at hand delves into the legal dispute of Washington v. United States Department of State, which revolves around the regulation of technical data related to 3

nancial institutions for purposes of anti-money laundering (AML) controls and federal reporting requirements.Further complicating the legal compliance challenge is that, in addition to the governmental bodies with regulatory authority over gaming, there are eight different criminal and civil laws that fundamentally shape gambling at the federal level, governing activities within all the states. These include:The Wire Act, 18 U.S.C. § 1084.The Unlawful Internet Gambling Enforcement Act (UIGEA), 31 U.S.C. §§ 5361-67.The Illegal Gambling Business Act, 18 U.S.C. § 1955.The Wagering Paraphernalia Act, 18 U.S.C. § 1953.The Johnson Act, 15 U.S.C. § 1953.The Anti-Lottery Act, 18 U.S.C. § 1175.The Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-21.The Interstate Horseracing Act, 15 U.S.C. §§ 3001-07.Furthermore, there are several ancillary, broadly applicable federal criminal laws that likewise affect state gaming. These laws include the federal money laundering statutes (18 U.S.C. §§ 1956 and 1957), the Racketeering and Corrupt Organizations Act (RICO) (18 U.S.C. §§ 1961-68), and the Travel Act (18 U.S.C. § 1952).Beyond FinCEN’s regulatory authority, multiple U.S. agencies and their investigatory arms enforce criminal and civil laws associated with gaming. These agencies include the U.S. Department of Justice (DOJ), which investigates criminal activity through the Federal Bureau of Investigation (FBI) and prosecutes offenses nationally through its multitude of lawyers. In addition, the Treasury has enforcement authority (beyond FinCEN) through the Internal Revenue Service (IRS), which oversees taxation and other potentially relevant components.These are the principal federal entities expected to take primary enforcement action in relation to internet gaming in the United States. But what form will the enforcement action take, particularly as we move away from brick-and-mortar casinos with physical currency to increasingly web- and app-based gaming? Some answers may lie in recen

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 narrowly a “safe harbor” provision under 18 U.S.C. § 1957(f) for defense attorneys – and did so in a case in which the evidence, if accepted, made clear that the safe harbor did not apply. Stated otherwise, bad facts may have resulted in inappropriately broad language applicable to other cases.As we just blogged, the U.S. Attorney’s Office for the Southern District of New York also announced on April 25 that Robert Wise (“Wise”), a New York attorney, had pled guilty to a single count of conspiring to commit money laundering, in violation of 18 U.S.C. § 371. This case arose out of the indictment of Vladimir Voronchenko, who has been charged in connection with a scheme to make payments to maintain multiple properties in New York and Florida owned by his friend and associate, sanctioned Russian oligarch Viktor Vekselberg. These two cases are very different. But they both illustrate how attorneys – either business attorneys, or criminal defense attorneys – can get caught up in the problems of their own clients, particularly given the ability of the

egations, between 2014 and 2016, Watts conspired with his co-defendants to inflate the share price of Hydrocarb Energy Corporation (“HECC”) through an illegal scheme using false and fraudulent sales pitches and high-pressure, manipulative tactics to get investors, often elderly people, to purchase inflated stock. Watts and the others ran a “boiler room” operation to effectuate this scheme, paying the boiler room participants half of his proceeds to line up victims to his pump-and-dump scheme. Watts’ own personal fortune was invested in HECC and when HECC’s failure became inevitable, and Watts used the scheme to sell his shares as quickly as he could. Following a jury trial in 2019, Watts was convicted of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371; conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1349 and 1343; securities fraud in violation of 15 U.S.C. §§ 78j(b), 78ff; conspiracy to commit money laundering in violation of 18 U.S.C. §§ 1956(h) and 1957(a); and three counts of money laundering in violation of 18 U.S.C. § 1957(a) for his participation in a stock manipulation scheme.Watts’ Sentencing Guidelines range was 235 to 293 months. The district court granted Watts a downward variance from the Guidelines and sentenced Watts to one year and one day imprisonment, in addition to $4,430,354.03 in restitution and $561,111 in forfeiture.The AppealOn appeal, Watts argued that the Government constructively amended his indictment, that the district court abused its discretion in denying his motion for a new trial, and that the district court erroneously calculated the forfeiture and restitution he owed. The Second Circuit panel quickly rejected Watts’ arguments on appeal. The panel determined that there was not a substantial likelihood that Watts was convicted of an offense other than those charged by the grand jury; there was “ample trial evidence” to support his conviction; and the district court properly calculated both Watts’ restitutio

tates Attorney for the Southern District of New York unsealed a twelve-count Indictment that charges Ho Wan Kwok (“Kwok”) and his financier, Kin Ming Je (“Je”), with various sprawling schemes – including one involving cryptocurrency – in which the defendants solicited investments in several entities and other programs via fraudulent misrepresentations to hundreds of thousands of Kwok’s online followers. Moreover, the Indictment alleges that Kwok and Je misappropriated hundreds of millions of dollars in fraudulently obtained funds during the conspiracy.Specifically, the Indictment charges Kwok with conspiracy to commit wire fraud, securities fraud, bank fraud, and money laundering. He was also charged with the underlying acts of wire fraud, securities fraud, international “promotional” money laundering (in violation of 18 U.S.C. § 1956(a)(2)(A)), international “concealment” money laundering (in violation of 18 U.S.C. § 1956(a)(2)(B)(i)), and “spending” money laundering (in violation of 18 U.S.C. § 1957), with the last charge resting on a single $100 million wire transfer. Je was also charged with these crimes, in addition to obstruction of justice.In regards to the money laundering schemes, the Indictment alleges that the defendants attempted to conceal the source of their illicit proceeds by transferring “money into and through more than approximately 500 accounts held in the names of at least 80 different entities or individuals[,]” through bank accounts in the U.S., the Bahamas, and the United Arab Emirates (“UAE”). Further, the Indictment alleges that the defendants used over $300 million of fraudulent proceeds for the benefit of themselves and their family members. The Indictment therefore contains a detailed notice of forfeiture, listing numerous assets that allegedly constituted or were derived from proceeds traceable to the charged offenses. These assets include numerous bank account balances collectively amounting to hundreds of millions of dollars, as well as a luxurious m

r at the FBI, money laundering investigations are generally conducted by the Money Laundering, Forfeiture, and Bank Fraud Unit (MLFBU) in its Criminal Division.These teams of investigators and prosecutors at the DOJ and FBI frequently work together with the personnel at the Financial Crimes Enforcement Network (FinCEN) to detect and prosecute money laundering, both in the United States and abroad.There are Numerous Laws Against Money LaunderingThese agencies are tasked with enforcing a wide variety of AML laws to combat money laundering, many of which are extremely wide-reaching. Several of them even regulate financial institutions across the country, effectively deputizing them as money laundering investigators and whistleblowers and punishing them for not sounding the alarm when they detect suspicious financial activity by their customers. The fundamental AML law in the United States is the Bank Secrecy Act, or BSA, though it is the Money Laundering Control Act (18 U.S.C. § 1956 and 1957) that makes money laundering a federal offense. It was the BSA, however, that first established the regulatory framework that made financial institutions take steps to prevent, detect, and report to federal law enforcement any signs of money laundering or the misuse of the US financial system to launder criminal proceeds. Other important federal money laundering laws that financial institutions need to be aware of are the:Anti-Drug Abuse ActAnnunzio-Wylie Anti-Money Laundering Act Money Laundering Suppression Act Money Laundering and Financial Crimes Strategy Act Patriot Act Intelligence Reform & Terrorism Prevention ActCorporate Transparency ActMany of these laws impose strict compliance obligations on financial institutions across the country.An Increased Attention to Money Laundering Since the War on TerrorMoney laundering has always been an issue. Criminals who acquire assets or funds through illegal means need a way to clean up or launder, their ill-gotten gains to make them appe

Anti-money laundering programs generally should (in some cases, must) include a customer identification program (commonly referred to as "Know-Your-Customer" or "KYC"), with procedures to obtain certain customer information and to verify that information.Anti-Money Laundering and Non-Financial InstitutionsIn addition to the anti-money laundering laws that apply to money transmitters and other money services businesses, all U.S. persons are subject to the criminal anti-money laundering laws, particularly 18 U.S.C. §§ 1956, 1957. The criminal anti-money laundering laws generally prohibit engaging in transactions where the proceeds at issue derive from, or are intended to facilitate or conceal illegal activity, or where a party to the transaction is "willfully blind" to the illegal activity.

Why the $10,000 threshold? Although violations of the criminal statutes can occur with amounts under $10,000 (which is one reason why NFT sellers should ensure they are never willfully blind to illegally derived proceeds inanyamount), the proposed $10,000 threshold may help rebut a willful blindness allegation and, further, one of the broadest money laundering statutes (18 U.S.C. § 1957) is relevant only to transactions involving $10,000 or more. In addition, $10,000 is a threshold relevant to other AML regulatory requirements (such as the requirement for businesses to report cash transactions greater than $10,000 by filing IRS Form 8300).In addition, if there are any concerns regarding the source of funds (whether above or below the $10,000 threshold), it is advisable to have a buyer complete a certification document attesting that no funds used in the transaction were derived illegally.

gov) See 18 USC Section 3292.https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/28/fact-sheet-president-bidens-comprehensive-proposal-to-hold-russian-oligarchs-accountable/ See 18 USC Section 1957 (“Whoever…knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity….”).https://www.justice.gov/opa/pr/fact-sheet-administration-legislative-proposals-support-kleptocracy-asset-recoveryhttps://www.justice.gov/opa/pr/fact-sheet-administration-legislative-proposals-support-kleptocracy-asset-recovery

The Biden Administration is proposing to amend the FCPA to fill in this gap. To fill in this gap, federal prosecutors have applied federal anti-money laundering prohibitions, 18 U.S.C. §§ 1956 and 1957, to charge foreign officials where they conducted financial transactions involving the proceeds of “specified unlawful activities” – violations of the FCPA, in order to conceal and disguise the proceeds.Over the years, DOJ has expanded use of AML charges in “run-of-the-mill” FCPA cases. To this end, DOJ has added AML counts along with FCPA charges.