Structuring money laundering, outlined in 18 U.S. Code § 1956, goes by many names. Structuring, report evasion, and smurfing are just a few names for this type of money laundering. Structuring occurs when money laundering actions are taken to avoid state or federal financial transaction reporting requirements. In the past, criminals would attempt to subvert reporting requirements by depositing their money across multiple locations in order not to trigger the necessary reporting. Because of this, structuring laws were put in place.
As with all money laundering crimes, structuring money laundering requires that the defendant be knowing and have participated or attempted a transaction. In this instance knowing means that the defendant is aware that both the source of the funds and its destination are related to illegal activity. The defendant need not know the exact activity if they are aware it is illegal. Likewise, a transaction refers to any distribution of illegal funds. It is also important to know that structuring money laundering is divided into the three offenses financial transactions, international transmissions, and stings.
Financial Transactions Explained
The first category of structuring money laundering offenses are financial transactions. As found in 18 U.S. Code § 1956 it reads:
1. Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity-
B. knowing that the transaction is designed in whole or in part-
(ii) to avoid a transaction reporting requirement under State or Federal law
The simplest way to understand the elements of a financial transactions offense is to break it down into its two basic parts, that it be financial, and that it be a transaction. Here, the word financial means that it must have funds involved, and the word transaction means that it must contain a form of distribution of proceeds received from crime. Additionally, financial transactions are also defined by their predicate offenses, both the original crime and the crime this process is attempting to cover. which are categorized in State, Federal, and Foreign law. This is because the funds must come from a crime that falls within the defined categories of criminal predicate offenses. So, a structuring money laundering offense is classified as a financial transaction
International Transmissions Explained
The second type of concealment money laundering offense, international transmissions, as found in 18 U.S. Code § 1956 reads:
2. Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States-
(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part-
(ii) to avoid a transaction reporting requirement under State or Federal law
International transmissions are easily defined as any action or attempted action to transmit funds from somewhere inside the U.S. to somewhere outside the U.S., or from somewhere outside the U.S. to somewhere inside the U.S. If this is also a structuring crime it must also be for the purpose of avoiding transaction reporting guidelines. Like financial transactions, the predicate offenses must fall into the categories of what constitutes a criminal predicate offense.
The last type of structuring money laundering offense are stings which when defined by 18 U.S. Code § 1956 states:
3. Whoever, with the intent-
(C) to avoid a transaction reporting requirement under State or Federal law,
conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.
To keep it brief, stings are simply a variation of financial transactions in which law enforcement has manipulated someone into believing that funds are from a criminal source and are being used for another criminal activity when in reality they are not. So, a structuring offense becomes classified as a sting when law enforcement officers collude with someone to attempt to avoid transaction reporting requirements. Once again, this form of money laundering offense is limited by the categories of predicate criminal offenses.
What the Prosecution Has to Prove
To be found guilty of a structuring money laundering offense in any form the prosecution must prove beyond a reasonable doubt that:
1. The defendant knew the funds were profits of illegal criminal activity; and
2. The defendant participated in a financial transaction of said funds; or
3. The defendant had intent to participate in a financial transaction of said funds; and
4. The intent was to avoid a transaction reporting requirement under State or Federal law.
If the prosecution proves these elements beyond a reasonable doubt the defendant will be found guilty. If the prosecution does not prove these elements beyond a reasonable doubt, then the defendant will be found not guilty.
Possible Defenses for Structuring Money Laundering
When formulating a defense against this charge there are a few strategies to keep in mind:
1. Proving that the defendant did not know the funds were coming from an illegal activity. One of the elements of this crime is that the defendant knew the funds were both coming from and used for illegal activity. If one can demonstrate with supporting evidence that the defendant was ignorant of this fact, they cannot be guilty.
2. Proving that the defendant did not have an intent to participate in a money laundering financial transaction. If one can prove with supporting evidence that the defendant did not have intent to complete the action or could not have completed the action, then they cannot be guilty.
3. Demonstrating a lack of evidence that the funds came from a crime. If one can prove that the funds did not come from an illegal activity, then it is not money laundering.
Sentencing for Structuring Money Laundering
In addition to sentencing guidelines, judges also look at other factors when deciding sentencing including:
1. The defendant’s personal history
2. Criminal history or lack of one
3. The details of the crime
Generally, money laundering is punishable by no more than 20 years. Additionally, all funds are subject to seizure, the judge may impose a fine no greater than $500,000 or twice the value of the funds, and the government may claim forfeiture of all property in proximity to the criminal activity.
The Kushner Law Group has had years of experience defending and protecting the rights of our clients in both New York State and the Federal courts. We have won successful results on behalf of our clients and are here to protect your rights through the prosecutorial process if you have been charged with any form of structuring money laundering. To learn more about the Kushner Law Group, please click here. Call us now for a free consultation at 718-838-9341.
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