Money laundering in Nevada is defined as disguising the financial proceeds from illegal activity as money from a legitimate source. This typically occurs in drug trafficking and fraud cases. Under 18 U.S.C. §§ 1956 & 1957, money laundering carries up to 20 years in federal prison, fines, restitution, and asset forfeiture.
In this article, our Las Vegas criminal defense attorneys discuss:
- 1. What is federal money laundering in Nevada?
- 2. What are the elements of money laundering under federal criminal law?
- 3. What is the penalty for money laundering in the U.S.?
- 4. How can you fight the charges in Nevada?
- 5. What is the statute of limitations for money laundering?
1. What is federal money laundering in Nevada?
The legal definition of the federal crime of money laundering is knowingly camouflaging the source of unlawfully obtained money. Most money laundering progresses in three steps:
- Placement: Money laundering begins with taking cash generated from an illegal activity and placing it into the financial system. An example is taking money from a drug sale and depositing it into a bank.
- 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.
- 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 offense 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 money laundering transaction as long as the person intended to conceal the cash’s source.
There are various schemes that qualify as money laundering crimes, such as:
- 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”): Splitting bank account deposits into smaller amounts to evade monetary transaction reporting requirements.
- Cash-intensive business: A business is set up to receive illegally obtained cash that is then declared as lawful earnings.
- Bank capture: Transferring an amount of money through a bank in which the alleged money launderers have a controlling interest.
- Trusts and shell companies: These mechanisms allow money to be stored without divulging the true owner.
- Laundering through casinos: Converting cash from a crime into chips, and then converting it back to cash. This is especially prevalent in Nevada.
- Tax evasion: Failing to report to the IRS money transactions greater than $10,000.
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 it does not matter what form the money takes, such as cash, money orders, checks, or other negotiable instruments.1
2. What are the elements of money laundering under federal criminal law?
A key element in Nevada money laundering cases is that the money at issue was derived from certain specific crimes – a.k.a. specified unlawful activities (SUAs). SUAs include nearly every serious federal crime such as:
- murder, kidnapping, robbery, or other violent criminal conduct
- extortion, theft, or embezzlement
- drug crimes (including drug trafficking or manufacturing controlled substances)
- racketeering / organized crime (RICO)
- human trafficking
- white-collar fraud crimes (such as mail fraud, wire fraud, and/or bank fraud)
- child pornography
- export and trading violations
The other elements of money laundering offenses vary depending on whether the incident involved:
- domestic money laundering within the United States; and/or
- international money laundering involving a foreign country; and/or
- money laundering stings
The elements also turn on whether the defendant is being accused of promoting SUAs, concealing the SUA, or evading reporting requirements.2
3. What is the penalty for money laundering in the U.S.?
Depending on the specific charges, federal money laundering convictions carry criminal penalties of:
- Up to twenty (20) years in federal prison (which is not located in Nevada); and/or
- Up to $500,000 in fines or twice the value of the property involved in the money laundering scheme (whichever is greater).
Defendants convicted of violating money-laundering laws in Nevada may also be ordered to pay victim restitution. And they face very civil penalties such as asset forfeiture.3
4. How can you fight the charges in Nevada?
Three common defenses to Nevada money laundering charges are:
- No money laundering. Merely being in possession of money generated from criminal activity is not – by itself – money laundering. If the U.S. Attorney’s Office cannot prove beyond a reasonable doubt that the defendant 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 any underlying crime.)
- 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 federal prosecutor cannot prove beyond a reasonable doubt that the defendant intended to money launder, then the defendant may be liable for any underlying crime – but not for laundering.
- Police misconduct. Federal law enforcement 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 that asks the federal court to disregard all the illegally obtained evidence. And if the court complies, the government’s case against the defendant may be too weakened to proceed.
Typical evidence in money laundering cases includes video- and audio recordings from undercover police or informants, financial statements and records of financial transactions, currency transaction reports, and expert testimony by financial forensic experts.
5. What is the statute of limitations for money laundering?
The statute of limitations to bring federal money laundering charges in Nevada is five (5) years after the alleged crime.5
- Department of Justice – money laundering and asset recovery
- Department of the Treasury – money laundering
- Financial Crimes Enforcement Network – History of Anti-Money Laundering (AML) Laws
- Financial Action Task Force (FATF)
- 18 U.S.C. 1956 – Laundering of monetary instruments; 18 U.S.C. 1957 – Engaging in monetary transactions in property derived from specified unlawful activity. See also United States v. Boyle, (3rd Cir. 2021) 849 Fed. Appx. 325. See also United States v. Sanders, (5th Cir.) 952 F.3d 263.
- Same. See, e.g., Joint Law Enforcement Operation Results In Arrests And Federal Drug Trafficking And Money Laundering Charges, DOJ – U.S. Attorney’s Office – District of Nevada (July 14, 2021)
- 18 U.S.C. § 3282.