Thursday, February 16, 2012
Senior Specialist in American Public Law
This is an overview of the elements of federal criminal money laundering statutes and the sanctions imposed for their violation. The most prominent is 18 U.S.C. 1956. Section 1956 outlaws four kinds of money laundering—promotional, concealment, structuring, and tax evasion laundering of the proceeds generated by designated federal, state, and foreign underlying crimes (predicate offenses)—committed or attempted under one or more of three jurisdictional conditions (i.e., laundering involving certain financial transactions, laundering involving international transfers, and stings). Its companion, 18 U.S.C. 1957, prohibits depositing or spending more than $10,000 of the proceeds from a section 1956 predicate offense. Violations of section 1956 are punishable by imprisonment for not more than 20 years; section 1957 carries a maximum penalty of imprisonment for 10 years. Property involved in either case is subject to confiscation. Misconduct which implicates sections 1956 and 1957 may implicate other federal criminal statutes as well. Federal racketeer influenced and corrupt organization (RICO) provisions outlaw acquiring or conducting the affairs of an enterprise (whose activities affect interstate or foreign commerce) through the patterned commission of a series of underlying federal or state crimes. RICO violations are also 20-year felonies. Every RICO predicate offense, including each “federal crime of terrorism,” is automatically a section 1956 money laundering predicate offense. A second related statute, the Travel Act (18 U.S.C. 1952), punishes interstate or foreign travel, or the use of interstate or foreign facilities, conducted with the intent to distribute the proceeds of a more modest list of predicate offenses or to promote or carry on such offenses when an overt act is committed in furtherance of that intent. Such misconduct is punishable by imprisonment for not more than five years. Other federal statutes proscribe, with varying sanctions, bulk cash smuggling, layering bank deposits to avoid reporting requirements, failure to comply with federal anti-money laundering provisions, or conducting an unlawful money transmission business.
The Supreme Court has held that the section 1956 ban on attempted international transportation of tainted proceeds for the purpose of concealing their ownership, source, nature, or ultimate location is limited to instances where concealment is a purpose rather than an attribute of the transportation (simple smuggling is not proscribed as such), United States v. Cuellar, 553 U.S. 550 (2008). In a second case, the Court indicated that for purposes of section 1956 the “proceeds” of a predicate offense often referred to the profits rather than the gross receipts realized from the offense, United States v. Santos, 553 U.S. 507 (2008). Congress responded by defining “proceeds” for purposes of sections 1956 and 1957 as the property obtained or retained as a consequence of a predicate offense, including gross receipts, P.L. 111-21, 123 Stat. 1618 (2009)(S. 386)(111th Cong.).
This is an abridged version of CRS Report RL33315, Money Laundering: An Overview of 18 U.S.C. 1956 and Related Federal Criminal Law , by Charles Doyle, without the footnotes, appendices, or most of the citations to authority found in the longer report. Related CRS Reports include CRS Report RL33020, Terrorist Financing: U.S. Agency Efforts and Inter-Agency Coordination, by Martin A. Weiss et al., and CRS CRS Report RS21547, Financial Institution Customer Identification Programs Mandated by the USA PATRIOT Act, by M. Maureen Murphy.
Date of Report: February 8, 2012
Number of Pages: 9
Order Number: RS22401
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