What Is “Money Laundering”?
In white collar criminal cases, federal prosecutors frequently charge defendants with some form of money laundering. In broad terms, money laundering is the process of attempting to ‘”cleanse the taint” from the proceeds of some criminal activity. One of the key federal money laundering statutes, 18 U.S.C. § 1956, makes it a crime for a person to knowingly engage in a financial transaction designed to “conceal or disguise” the source, ownership, or control of the proceeds of any unlawful activity.
Florida Man Receives 14 Years After Using Insurance Fraud Proceeds to Buy Gold Coins
A recent decision from the U.S. 11th Circuit Court of Appeals, United States v. Thomas, illustrates how this law is applied in practice. Federal prosecutors charged the defendant in this case, a Florida insurance agent, with defrauding 69 of his clients. Essentially, the government alleged the defendant collected insurance premiums from these clients but provided fake policies in return. The scheme was discovered after some of the “policyholders” tried to file claims after a hurricane damaged their properties.
A grand jury indicted the defendant on 24 charges, including 4 counts of money laundering under 18 U.S.C. § 1956. The defendant pleaded guilty to all charges. A federal judge subsequently sentenced the defendant to 14 years in prison.
Despite his plea, the defendant nevertheless appealed to the 11th Circuit. He maintained that the trial court erred in accepting his guilty plea to the money laundering charges because there was an “insufficient factual basis to support them.” More precisely, he argued that there was no evidence he used any financial transactions to conceal the proceeds of his insurance fraud.
The appellate court noted that the four money laundering counts alleged the defendant used his criminal proceeds to buy (1) a Lexus, (2) a condominium, (3) gold coins, and (4) transfer funds to a brokerage account. There was no question using the proceeds to buy gold coins qualified as money laundering, the Court said, as that involved converting the proceeds of the defendant’s fraud into a form that “would be easier to hide than other assets.”
The other three transactions, however, did not qualify as money laundering. In the case of the brokerage account, for instance, the defendant simply transferred money from his checking account to the brokerage account. Both accounts were in the defendant’s name so there was no “concealment,” which is required by the money laundering statute. Similarly, the Lexus and condo purchases were “personal payments” from the proceeds of criminal activity but not an attempt to conceal those proceeds.
Nevertheless, the 11th Circuit upheld the defendant’s 14-year prison sentence. The trial court based the sentence, in part, on the fact the defendant committed at least one money laundering violation. Since the purchase of the gold coins qualified, his sentence stood.
Contact the Joshi Law Firm Today
Federal prosecutors take financial crimes very seriously. This includes alleged attempts to conceal or otherwise hide the proceeds from any suspected criminal activity. If you have been charged with such offenses and need legal representation from a skilled Orlando white collar criminal defense attorney, contact the Joshi Law Firm, P.A., today to schedule a free consultation.
Sources:
law.cornell.edu/uscode/text/18/1956
scholar.google.com/scholar_case?case=16387751148313428074
