November 13, 2013

Our attorneys at Wallin & Klarich want to warn you that engaging in money laundering in California is punishable as a federal offense pursuant to the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956 and 1957).

The United States prohibits you from engaging in a financial transaction with proceeds that were generated from certain specific crimes. Additionally, the law requires that you specifically intended to conceal the source, ownership or control of the funds. There is no minimum amount of money, nor is there a requirement that the transaction succeed in actually disguising the money.

Moreover, a “financial transaction” need not involve a bank or even a business. Merely passing money from one person to another, provided it is done with the intent to disguise the source, ownership, location or control of the money, is considered a financial transaction under the law.

The following case illustrates a perfect example of a money laundering scheme which, if convicted, could send you to federal prison for decades and cost you millions in fines.

U.S. v. Liberty Reserve, et al. (Southern District, New York May 28, 2013)

money laundering in California
Money laundering in California is a serious crime punishable as a federal offense. Call an experienced attorney today if you are charged with money laundering.

Federal prosecutors indicted seven people in May in connection with running an online, underworld banking operation in perhaps the biggest money laundering scheme in U.S. history. Handling more than $6 billion in transactions for criminals worldwide, operators of Liberty Reserve, a currency transfer and payment processing company based in Costa Rica, allegedly allowed customers to move money anonymously from one account to another via the Internet with virtually no questions asked.1

Over roughly seven years, Liberty Reserve processed 55 million illegal transactions worldwide for 1 million users, including 200,000 in the United States.

Customers were allowed to open a Liberty Reserve account using phony names, such as “Russian Hacker” and “Hacker Account.” One undercover agent was able to register using the name “Joe Bogus” and the address “123 Fake Main Street” in “Completely Made Up City, New York,” conducting transactions identified as “ATM skimming network” and “for the cocaine.”2

On Oct. 31, co-founder of Liberty Reserve Vladimir Kats pled guilty to five charges in U.S. District Court, including conspiracy to commit money laundering, conspiracy to operate and operating an unlicensed money-transmitting business, marriage fraud and receiving child pornography. He faces a 15-year minimum sentence on the child pornography conviction alone and up to 75 years in federal prison if given the maximum sentence on all counts. Charges against Kats’ six co-defendants are still pending.3

How is Money Laundering Prosecuted under Federal Law?

Pursuant to 18 U.S.C. §§ 1856, you are guilty of money laundering if you knowingly conduct or attempt to conduct a financial transaction involving the proceeds of a “specified unlawful activity.” A specified unlawful activity refers to offenses such as drug trafficking, murder, kidnapping, robbery, extortion, bribery, fraud, child exploitation, and other crimes listed under Section 1956.

You can also be prosecuted for money laundering if you transport, transmit or transfer funds through the United States, originating or arriving inside or outside the country, under the following conditions:

  • With intent to commit a specified unlawful activity; or
  • With intent to evade taxes or otherwise defraud the Internal Revenue Service (26 U.S.C. §§ 7201 or 7206); and
  • Knowing that the transaction is designed to:
  • Conceal or disguise the nature, location, source, ownership, or control of the proceeds of a specified unlawful activity; or
  • To avoid a transaction reporting requirement under state or federal law.

Under 18 U.S.C. § 1857, you can be prosecuted if you knowingly engage or attempt to engage in a monetary transaction of “criminally deprived property” of more than $10,000 which was produced from specified criminal activity as described above. The government does not have to prove you knew the funds you were processing came from unlawful activity.

Sentencing and Punishment for Violating 18 U.S.C. §§ 1856 and 1857

If you are convicted of money laundering in a federal court under 18 U.S.C. § 1856, you face up to 20 years in prison, a fine of not more than $500,000 or double the value of the property involved in the transaction, whichever is greater, or by both fine and imprisonment.

A conviction under 18 U.S.C. § 1857 can result in imprisonment of up to 10 years, a fine of double the value of the property involved in the transaction, or both.

Contact Wallin & Klarich if You are Charged with Committing or Attempting to Commit Money Laundering in California

At Wallin & Klarich, our attorneys have over 30 years of experience successfully defending clients facing serious federal criminal charges. Our attorneys have helped hundreds of clients avoid long sentences and heavy fines that could result upon a conviction in federal court. We may be able to get your charges reduced or dismissed. If your case goes to trial, we will pursue every available defense to protect your legal rights.

With offices in Los Angeles, Sherman Oaks, Torrance, Tustin, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville, the criminal defense attorneys at Wallin & Klarich will make certain you are treated fairly through every step in the process. We will do everything we can to get you the best possible result in your case.

Call us today at (877) 4-NO-JAIL or (877) 466-5245 for a free telephone consultation. We will get through this together.


1. [New York Times: “Online Currency Exchange Accused of Laundering $6 Billion”; http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-operators-accused-of-money-laundering.html?_r=0&adxnnl=1&pagewanted=2&adxnnlx=1382135465-pNT1zwilLUUOE5W+UpWdnA]
2. [Yahoo! News: “7 Charged in $6B Online Money Laundering Case”; http://news.yahoo.com/7-charged-6b-online-money-laundering-case-223715413.html]
3. [U.S. Department of Justice, Office of Public Affairs: “Co-founder of Liberty Reserve Pleads Guilty to Money Laundering in Manhattan Federal Court”; http://www.justice.gov/opa/pr/2013/October/13-crm-1163.html]

Author

Author: Paul Wallin

Paul Wallin is one of the most highly respected attorneys in Southern California. His vast experience, zealous advocacy for his clients and extensive knowledge of many areas of the law make Mr. Wallin a premiere Southern California attorney. Mr. Wallin founded Wallin & Klarich in 1981. As the senior partner of Wallin & Klarich, Mr. Wallin has been successfully representing clients for more than 30 years. Clients come to him for help in matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies. Mr. Wallin also helps clients with family law matters such as divorce and child custody.

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