Federal Laws for "Money Laundering" (18 U.S.C. § 1956)
Explained by Las Vegas Criminal Defense Attorneys

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Federal authorities expend substantial money and manpower to investigate alleged money laundering schemes. People ultimately convicted of money laundering can be sentenced to decades in prison and astronomical fines.

On this page our Las Vegas criminal defense attorneys provide an overview of the federal law of money laundering in Nevada. Keep reading to learn more about the definition of money laundering, common defenses, and potential penalties.

Definition

The legal definition of the crime of "money laundering" under federal law in Nevada is knowingly camouflaging the source of unlawfully obtained money. Most money laundering progresses in three steps, which are 1) placement, 2) layering and 3) integration:

  1. Placement: Money laundering begins with taking cash generated from criminal activity and placing it into the financial system. An example is taking money from a drug sale and depositing it into a bank.

  2. Layering: Once the illegally obtained money has been "placed," it is then used in one or more financial transactions that are meant to disguise the money's origin. An example would be converting drug money into different denominations or currencies.

  3. Integration: After the criminal proceeds have been "layered," they are then handed out to one or more people as wealth. For example, the person who helps convert drug money into different denominations may keep a cut of it before returning the rest of it to the drug dealers.

Note that money laundering is a criminal activity even if none of the three steps involves a bank or business . . . simply taking cash derived from a crime and physically handing it to someone else could qualify as a violation under 18 U.S.C. § 1956 as long as the person intended to conceal the cash's source.

Also note that there is no minimum cash amount necessary to commit the federal crime of money laundering in Nevada. A person may still be prosecuted for it even if the money laundering scheme fails. And federal court has jurisdiction over the case only if the alleged money laundering affects interstate or foreign commerce.

Specified Unlawful Activities

In order for someone to be convicted of money laundering in Nevada, the money at issue needs to have been derived from certain specified unlawful activities (SUAs). These include nearly every serious federal crime such as:

  • murder, kidnapping, robbery, or other violent crimes

  • extortion, theft, or embezzlement

  • drug crimes

  • racketeering

  • human trafficking

  • terrorism

  • fraud crimes

  • child pornography

  • export and trading violations

Note that the Financial Action Task Force (FATF) is the intergovernmental body that helps to create and promote policies to fight money laundering, especially terrorist financing.

Methods of money laundering

Money laundering is an extremely broad crime that can occur in countless different ways. In Nevada, one of the most common money laundering schemes involves using casinos. Reno NV criminal defense attorney Michael Becker gives an example:

Example: Sam robs a store in Henderson and takes $10,000 from the register. He then goes into the Green Valley Ranch, converts it to chips, gambles for an hour, and cashes in the chips for a check. Sam then deposits the check into his personal bank account and intends to claim it as winnings from gambling. If caught, the U.S. Marshals Service could arrest Sam and book him at the Henderson Detention Center for laundering the robbery money through the casino. Sam would also face robbery charges as well.

Other methods of criminal money laundering in Nevada include the following:

  • Trade-based laundering: Masking the flow of cash by undervaluing invoices, overvaluing invoices, or double-invoicing.

  • Real-estate: Buying land with criminal proceeds and then selling it.

  • Bulk cash smuggling: Taking criminal proceeds into a different jurisdiction and depositing it into an offshore bank or another financial institution.

  • Black salaries: Paying unregistered employees with laundered money.

  • Structuring ("Smurfing"): Breaking cash down into smaller deposits of money.

  • Cash-intensive business: A business is set up to receive illegally obtained cash that is then declared as lawful earnings.

  • Bank capture: Transferring cash through a bank which the alleged money launderers have a controlling interest in.

  • Trusts and shell companies: These mechanisms allow money to be stored without divulging the true owner.

Note that a person may also face money laundering charges for failing to report to the IRS any money transaction greater than $10,000.

Defenses

Just as there are many money laundering methods, there are just as many ways to fight allegations of them. The following are three of the most commonly used strategies to combat money laundering charges in Nevada.

  • No intent to money launder. Carrying out a financial transaction with proceeds from a crime qualifies as money laundering only if the person intends for the transaction to disguise the source of the money. As long as the U.S. Attorney's Office in Nevada cannot prove beyond a reasonable doubt that the defendant intended to money launder, then the defendant may be liable for the underlying crime but not for laundering.

  • No money laundering. Simply being in possession of money generated from criminal activity is not, by itself, money laundering. If a Nevada criminal defense attorney can show that the defendant never made a financial transaction with the proceeds of an underlying crime, then the defendant should not be held liable for money laundering. However, the defendant may still be prosecuted for that underlying crime.
  • Police misconduct. Federal authorities frequently carry out elaborate undercover operations when investigating an alleged money laundering case. If the police may have overstepped their bounds by conducting an illegal search, the defense attorney may file a motion to suppress evidence in Nevada that asks the Nevada federal court to disregard all the illegally-obtained evidence. And if the court complies, the government's case against the defendant may be significantly weakened.

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Penalties

All money laundering cases in this state are handled in either the Las Vegas federal courthouse or the Reno federal courthouse. The punishment for money laundering violations typically includes:

  • up to $500,000 in fines or twice the value of the property involved in the money laundering scheme (whichever is greater), AND/OR

  • up to twenty (20) years in federal prison (which is not located in Nevada)

Note that under Nevada's asset forfeiture laws courts may freeze a defendants' assets once he/she is charged with money laundering. That way the property may be used to satisfy a judgment if the defendant is ultimately convicted.

Also note that any officers, directors or employees of financial institutions who are convicted of money laundering are reported by the U.S. Attorney General to that financial institution's regulatory agency.

Arrested? Call . . . .

If you or someone know you has been accused of "money laundering" in Nevada, contact our Nevada federal criminal defense attorneys at 702-DEFENSE (702-333-3673) for a free consultation. Our experienced attorneys will do everything to achieve the best resolution possible for your case.

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