Federal Money Laundering Defense Lawyers

JANUARY 2019 UPDATE: The feds are cracking down on cannabis companies and individuals and companies in the bitcoin industry. If you have been arrested or concerned about your rights, please contact our federal money laundering defense lawyers today for a free consultation.

While many federal investigations target money laundering specifically, money laundering is also an “add-on” charge in many other types of federal inquiries. Our federal defense lawyers represent business owners, bankers, health care providers, and other clients who are facing money laundering charges nationwide.

Like most federal crimes, money laundering carries severe penalties. If convicted of money laundering in federal district court, individuals can face up to 20 years in prison and fines of $500,000 or twice the value of the property involved in the illicit transaction, whichever is greater. Clearly, if you are under investigation for money laundering, you need to take your situation extremely seriously. You need to execute a strategic defense, and this means that you need to speak with a highly-experienced federal defense lawyer as soon as possible.

The money laundering defense lawyers at Oberheiden, P.C. represent clients in federal money laundering and related cases nationwide. We fight to prevent money laundering charges during federal investigations, and we provide vigorous defense representation for federal grand jury proceedings and federal criminal trials. With centuries of combined experience, our defense attorneys have an extensive track record; and, when clients get us involved during the government’s investigation, we are usually able to resolve their investigations without charges being filed.

Do you really need a Federal Money Laundering Defense Lawyer?

Our attorneys have provided some commonly asked (and answered) questions with regards to money laundering, and the situations within which you may face investigation or even charges thereto related.

What Types of Transactions and Activities Constitute Money Laundering?

Money laundering crimes are defined in 18 U.S.C. § 1956 and 18 U.S.C. § 1957. While each statute contains a multitude of prohibitions, the primary transactions and activities that constitute money laundering are described as follows:

18 U.S.C. § 1956(a) (Laundering of Monetary Instruments):

“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 . . . with the intent to promote the carrying on of specified unlawful activity[;] with intent to engage in [tax fraud]; or . . . knowing that the transaction is designed in whole or in part . . . to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity [or] avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.”

18 U.S.C. § 1957(a) (Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity):

“Whoever. . . knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 [that] is derived from specified unlawful activity, shall be . . . fine[d] . . . or imprison[ed] for not more than ten years or both. . . . [T]he Government is not required to prove the defendant knew that the offense from which the criminally derived property was derived was specified unlawful activity.

Although 18 U.S.C. § 1957 and certain provisions of 18 U.S.C. § 1956 are limited in scope to transactions involving property derived from “specified unlawful activity,” the definition of this term is so broad that it encompasses virtually all types of federal crimes that have the potential to result in financial gain. This includes, but is not limited to:

  • Bank fraud
  • Government program fraud
  • Health care fraud
  • Insurance fraud
  • Securities fraud
  • Bribery of government officials
  • Drug crimes
  • Human trafficking
  • Smuggling and other import and export crimes
  • Theft and embezzlement
  • Violent crimes
  • Various types of criminal conspiracies

Additionally, while knowledge is a key element of money laundering under 18 U.S.C. § 1956(a) (“Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity . . . .”), it is not as significant an element of the government’s burden of proof under 18 U.S.C. § 1957(a). Under this statute, the fact that you knew you were engaging in a transaction is sufficient to establish culpability without proof that you knew that the transaction involved the proceeds of specified unlawful activity. This provision in 18 U.S.C. § 1957(a) is intended to allow for prosecution in cases where parties to transactions are “willfully ignorant” of the source of the funds or other property involved.

Federal Money Laundering Investigations Targeting the Cannabis Industry

As more states make the push toward marijuana legalization, the continued treatment of marijuana as a Schedule I controlled substance at the federal level creates a number of law enforcement risks for businesses in the cannabis industry. The same is true for banks and other businesses that serve companies in the cannabis industry as well.

The DOJ and Other Agencies are Targeting All Types of Businesses Involved in the Cannabis Industry

In addition to the risk of prosecution under the Controlled Substances Act (CSA), one of the biggest prosecution risks facing the U.S. cannabis industry is risk of prosecution for money laundering. As noted above, under the federal money laundering statute, potential penalties include fines of $500,000 or double the monetary value of the transaction at issue, whichever is greater, and up to 20 years behind bars. All parties to transactions involving proceeds of federally-outlawed activity (including cannabis sales) can face charges; and, even if prosecutors cannot prove all of the elements of money laundering under the facts of a particular case, they may be able to prosecute for attempt, conspiracy, or aiding and abetting—and the penalties in these cases can be equally severe.

While not a viable defense for companies in the cannabis business, in some cases, financial institutions and other third-party service providers may be able to avoid prosecution by claiming that they had no “intent to promote” the cultivation or sale of marijuana by entering into transactions with cannabis businesses. However, this is only a defense in cases involving transactions not exceeding $10,000. Under 18 U.S.C. § 1957, proof of intent to promote the underlying criminal activity is not an element of the prosecutions case if the value of the transaction exceeds $10,000.

Examples of transactions that can implicate the federal money laundering statutes, 18 U.S.C. § 1956 and 18 U.S.C.§ 1957, include:

  • Transactions related to the purchase of cannabis growing and cultivation supplies;
  • Transactions related to dispensary and retail storefront acquisitions, financing, construction, and equipment; and,
  • Banking and investment transactions involving the proceeds of cannabis sales.

Federal Authorities are Viewing Cross-Border Transactions as “Red Flags” for Money Laundering

In particular, the DOJ, FBI, IRS, and other agencies seem to be heavily scrutinizing cross-border transactions related to cannabis business activities. This includes transactions that cross state lines as well as transactions between U.S.-based businesses and companies in Canada and Mexico. While there is nothing inherently unique about these transactions that makes them particularly likely to involve efforts to launder money, federal authorities nonetheless seem to be taking the position that these transactions warrant particularly close scrutiny. 

In any case, due to the unique legal posture of the cannabis industry, individuals, businesses, and financial institutions that are targeted in money laundering investigations need to treat all federal inquiries with extreme caution. Our federal defense lawyers can advise you regarding the risks involved, and we can deal with the authorities for you in order to prevent misguided allegations from leading to potentially-dangerous money laundering charges. 

Federal Money Laundering Investigations Targeting Bitcoin and Other Cryptocurrency Transactions

We have also recently seen a significant uptick in federal money laundering investigations targeting individuals and businesses that engage in transactions involving bitcoin and other cryptocurrencies. As several recent high-profile cases have revealed, these transactions are not as untraceable as many bitcoin investors and traders were once led to believe. Dating back to 2018, the DOJ has publicized a string of bitcoin and other cryptocurrency-related investigations, all of which have included charges for money laundering among various other federal offenses. 

All Types of Cryptocurrency Transactions are Being Targeted

Although some of the DOJ’s law enforcement efforts targeting bitcoin and other cryptocurrency transactions have focused on the dark web, this is by no means the agency’s exclusive focus. In fact, recent DOJ cryptocurrency money laundering investigations have targeted individuals and companies including:

  • Bitcoin dealers and cash exchange businesses in the U.S. and abroad;
  • Foreign nationals engaging in cryptocurrency transactions with U.S. residents and businesses; and,
  • Individuals and organizations involved in cannabis, narcotics, and other transactions involving cryptocurrency.

In general, it seems that any individuals or entities that engage in a large volume of cryptocurrency transactions or isolated high-value transactions involving bitcoin and other cryptocurrencies are at increased risk for finding themselves on the DOJ’s radar.

Financial Institutions May Be Over-Reporting Cryptocurrency-Related Transactions in an Effort to Avoid Scrutiny

While the Coinbase subpoenas opened up many cryptocurrency traders’ and investors’ eyes to the fact that their transaction histories are not fully protected, exchanges are not the only entities with information that can be of use to federal authorities seeking to pursue money laundering investigations. Out of an abundance of caution (and as an act of self-preservation), it seems that some banks may be over-reporting cryptocurrency-related transactions to the federal government. When a transaction potentially raises criminal implications for a bank under 18 U.S.C. § 1956 or 18 U.S.C.§ 1957, the bank may not hesitate to disclose the transaction to the DOJ, FBI, or IRS. 

In many cases, these transactions do not involve criminal activity. While cryptocurrency is still a relatively new phenomenon (and therefore remains high on the government’s list of investigative and law enforcement priorities), and while there are indeed entities that use cryptocurrency for illegal purposes, it is equally clear that cryptocurrency transactions – and even high-value cryptocurrency transactions – are not inherently unlawful. Yet, many individuals and legitimate businesses are being forced to defend against allegations of money laundering and other crimes, and this often means affirmatively demonstrating that they are engaged lawful business activity in order to prevent prosecutors from seeking a grand jury indictment.

In all cases, defending against money laundering allegations related to bitcoin and other cryptocurrency transactions requires a strategic and custom-tailored approach. When you are at risk for federal prison time and hundreds of thousands or millions of dollars in fines, nothing can be assumed. Our federal defense attorneys can quickly get to the bottom of the government’s allegations, and we can use our experience to develop a defense strategy that is specifically designed to protect you against facing criminal charges for money laundering. 

What are Potential Defenses to Allegations of Federal Money Laundering?

While the federal money laundering statutes are broad, there are also several potential defenses to federal money laundering allegations. The defenses available in any particular case will depend on the specific facts and circumstances involved; and, to find out what defenses you have available, we encourage you to contact us immediately so that we can intervene in the government’s investigation. Potential defenses to money laundering allegations under 18 U.S.C. § 1956 and 18 U.S.C. § 1957 include:

  • Lack of Knowledge – As we mentioned above, knowledge is an element of the government’s burden of proof in federal money laundering cases (although the relevance of knowledge varies under 18 U.S.C. § 1956 and 18 U.S.C. § 1957). If you lacked the requisite knowledge for criminal culpability, you are not guilty of the crime alleged. 
  • Lack of Intent – As explained by the U.S. Department of Justice (DOJ), money laundering charges also require proof of varying degrees of intent. For example, if the government cannot prove that you intended to promote the carrying on of specified illegal activity, then you are not guilty under 18 U.S.C. § 1956(a). 
  • LawfullyDerived Property – If any transactions in which you have engaged have not involved unlawfully-derived property, then you are not guilty of money laundering. 
  • Legitimate Purpose for Financial Transactions – Likewise, if you were engaging in financial transactions for a legitimate purpose (or believed you were engaging in financial transactions for a legitimate purpose), this can provide a defense in some cases as well. 
  • Coercion or Duress – Were you coerced into engaging in unlawful transactions? Did you launder illegally-obtained funds under duress? While these defenses won’t apply in all cases, if you can show that you were forced to engage in unlawful transactions against your will, this can provide a complete defense to culpability. 
  • No (or Insufficient) Evidence – Don’t forget, the government always has the burden of proof. If prosecutors cannot collect enough evidence to prove your guilt beyond a reasonable doubt, then you do not have to raise any other defenses in order to avoid a conviction. 
  • Constitutional Violations – Even if prosecutors have the evidence that proves criminal culpability, if the evidence was obtained in violation of your constitutional rights, then it cannot be used against you in court. Our attorneys have significant experience using the provisions of the Fourth, Fifth, and Sixth Amendments to protect our clients. 

What Should You Do if You are Facing a Federal Money Laundering Investigation?

If you are being targeted by the DOJ, the Federal Bureau of Investigation (FBI), or any other federal agency for money laundering, what should you do to protect yourself? The key is to engage experienced legal representation as soon as possible. When you engage our federal defense team to represent you, our attorneys will work quickly to:

1. Determine the Specific Allegations Against You

Money laundering allegations can take many different forms, particularly in today’s world of electronic transactions and cryptocurrency. In order to build an effective defense, you need to know specifically why you are being investigated under 18 U.S.C. § 1956 or 18 U.S.C. § 1957. Are you being accused of funneling money through real estate or shell companies? Are you being accused of using digital currency transactions to hide the source of funds? Are you being accused of structuring transactions to avoid federal reporting requirements? These are all very different allegations that require very different defenses. 

2. Determine Whether You are Facing Other Charges as Well

In addition to knowing the specific nature of the government’s money laundering investigation, you also need to know if you are being targeted for prosecution for any other federal crimes. In many cases, individuals targeted in money laundering investigations will be at risk for prosecution for various fraud crimes and federal offenses as well. With our attorneys’ extensive experience on both sides of federal criminal matters, we can assess the circumstances of your investigation to determine whether you are at risk for facing other charges.

3. Make Sure You Don’t Do Anything That Could Get You Into (More) Trouble

At this point, you need to be very careful to do anything that could get you into trouble (or, potentially, get you into more trouble) with the federal government. Among other things, this means: (i) cease any questionable activity, (ii) do not communicate with anyone about your case, and (iii) make sure you do not destroy any documents or property that might possibly constitute evidence in the government’s case against you. Learn more about what not to do during a federal money laundering investigation

Experienced Federal Money Laundering Defense Lawyers Defending You Against Investigations and Charges

The federal money laundering defense lawyers at Oberheiden, P.C. can assess your case and help you determine an appropriate defense strategy.  If the accusations of wire fraud are merely a vindictive attempt by your spouse to gain leverage in your divorce proceedings, we can help you take measures that will prevent or reduce any investigative interest into your case.  Our lawyers can communicate with the authorities on your behalf and allow you to safely cooperate with the investigators without incriminating yourself or damaging your case.  Conversely, if we determine that the accusations of wire fraud may have merit, we can help you build a defensive strategy that will result in the most advantageous outcome under the circumstances.  Our number one objective is always to avoid criminal charges for our clients.

Contact the Federal Criminal Defense Team at Oberheiden, P.C.

Are you facing a federal money laundering investigation? Is your spouse is threatening you with accusations of wire fraud? Could you be at risk for decades of imprisonment and hundreds of thousands of dollars in fines? To discuss your case with an experienced federal money laundering defense lawyer or a member of our defense team in confidence, call us at 214-469-9009 or request a free case assessment online now. 

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