A Quick And Dirty Overview Of Federal Money Laundering Laws

Money laundering is one of the more common white-collar crimes charged in Florida. Although there are statutes on the books in Florida that prohibit money laundering, there are also Federal statutes that may come into play in a money laundering prosecution in Florida as well. Following is a discussion of Federal money laundering laws and what you need to know about them if you should happen to find yourself charged with money laundering in Florida.

Basics

Money laundering is a process by which an individual attempts to hide or obscure the source of funds derived in the course of a crime. Money laundering requires a “predicate offense,” or a crime that was committed during which the funds were received.

There are three steps to money laundering:

• Placement – when the money enters the legal financial system via a bank or some other legitimate financial institution.
• Layering – the transactions made with the money that makes tracing its original source difficult to ascertain.
• Integration – returning the money to the original individual who committed the crime.

Statutes

Federal money laundering statutes didn’t come about until the later part of the 20th century, beginning with the Bank Secrecy Act of 1970. This statute required financial institutions to keep records of cash purchases of negotiable instruments like cashiers checks and report to the Treasury Department any cash transactions over $10,000 from one individual in one day.

The next major piece of federal legislation came sixteen years later in the form of the Money Laundering Control Act of 1986. This law makes it illegal for individuals or institutions to carry out financial transactions using money they know have come from illegal activities. Specifically, individuals who deal with illicit funds with the intent of promoting illegal activity, violating tax laws, obscuring the source of the money, or avoiding federal or state requirements may expose themselves to criminal liability.

The terrorist attacks on America in 2001 spawned new federal money laundering legislation, which was written into the USA Patriot Act. In Title II, which is known as the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, legislators made the financing of terrorism illegal on the federal level. The Act made it illegal for financial institutions to look the other way on money laundering by requiring banks to check the names of its customers against a federal list of known or suspected terrorists. The Act also made it illegal for financial institutions to do business with known overseas shell banks.

More recently, the Anti-Money Laundering Act of 2020 (AMLA 2020) increased protections for whistleblowers and made rewards for turning in those who launder money larger. It also increased penalties for those who are found to repeatedly engage in money laundering. A major change instituted by the law requires shell companies to register the “beneficial owner” of the organization, which is an individual or entity with 25 percent or more ownership in the shell corporation. Such information is made available only to the Financial Crimes Enforcement Network (FinCEN), which may in turn provide that information only to law enforcement, federal regulators, or other financial institutions.