In recent days, a raid on different clothing companies in downtown Los Angeles revealed charges that businesses were laundering money through their business into the pocket of members of cartels located in Mexico (see: http://www.latimes.com/local/crime/la-me-fashion-district-raids-20140911-story.html#page=1). The scheme appeared to be somewhat complicated and involved the laundering of millions of dollars through the payment of pesos from Mexico. When being charged with a financial crime such as money laundering, persons can be charged in state court or federal court depending on the charges and whether they involve issues with federally insured banks, wiring of unlawful funds and/or transporting funds into or out of the country. As discussed below, whether a person is charged with a federal crime in California or for a state crime in Los Angeles or any other county, they should always retain and/or consult with a competent criminal defense attorney to understand their rights and properly defend themselves from serious criminal charges.
Legal definitions and crimes associated with money laundering
Money laundering can take many different forms but often has the same objective which mainly is to legitimize income earned from illegal activity and/or to evade paying taxes on such money. As indicated in the Los Angeles cartel money laundering case, the arrested suspects engaged in activity such as depositing just less than $10,000.00 into numerous different bank accounts. Such activity is called “smurfing” and is performed so that the bank won’t be required to report the transaction to the federal government for purposes of tax compliance. If a person engages in such activity with the intent to defraud the government including avoiding tax consequences, such conduct would violate federal law. Specifically, to be convicted of “smurfing” or unlawful “structuring” of financial transactions, a federal prosecutor must prove under 18 U.S.C. § 1956(a)(1)(B)(ii):
First, that defendant entered into a financial transaction or transactions with a financial institution engaged in interstate commerce, involving the use of proceeds of unlawful activities;
Second, that defendant knew that these were the proceeds of unlawful activity;
Third, that defendant knew that the transaction or transactions were structured or designed in whole or in part so as to avoid transaction reporting requirements under federal law.
Such elements are not necessarily easy for a prosecutor to prove and one must immediately retain and/or consult a competent criminal defense attorney as a conviction for federal money laundering could lead to a significant sentence in federal prison depending on a number of factors including the amount of transactions involved. Moreover, such charges can lead to forfeiture proceedings which can cause a defendant to lose items such as his house and car.
Unlawful Mail and Wire Transfers as Criminal Charges in California
Under 18 U.S.C. §1343, the federal government prohibits money laundering or other criminal acts by use of mail and/or wire. If in the Los Angeles money laundering cartel case, suspects in Los Angeles, mailed a check out of state involving laundered funds, such act can be the basis for a conviction under federal law. Moreover, wire transfers out of the country involving laundered monies can also be the basis for federal charges of money laundering. In order to be convicted of such crimes, a prosecutor usually needs to prove at least 3 elements:
1. Intent to commit the unlawful act;
2. The obtaining of property by means of fraud and/or a a scheme or artifice to defraud; and
3. A wire communication and transaction through the mail.
There are many types of fraud schemes that can expose a person to charges under federal law or California state law. One can embezzle money from an elderly person and send the funds out of state by mail which would allow both a state prosecutor to file charges for embezzlement, elder abuse and other charges and allow a federal prosecutor to initiate a prosecution for mail fraud. Charges regarding financial crimes whether it be a theft, embezzlement, check kiting or money laundering can successfully defended as along as a person engages an attorney with experience in this very complicated field of law. As such, if arrested for such crime, one should immediately contact a criminal defense lawyer who can represent and guide a person to the successful resolution of their case.