Money laundering is the act of hiding or disguising the source or destination of illegally-obtained funds so that they are difficult to trace.  Money is laundered so that the profits of theft, drug sales, or other illegal activity will appear to come from a legitimate source.   While money laundering is often thought of as more related to drug crimes, frequently money laudering is used in business related schemes and white collar crime.  For example, money laundering charges may be associated with illegal funds obtained through securities fraud, mortgage fraud, bribery, business fraud, and other financial crimes.

What are the elements of money laudering?

The government must prove the following elements under 18 U.S.C. § 1956 beyond a reasonable doubt in order to convict you of money laundering:

1. You conducted a financial transaction (transferring money, etc.) with proceeds from an illegal activity;
2. You knew that the proceeds were from illegal activity; and you did it to:
3. continue the illegal activity, or to:
4. hide it from the IRS, or to:
5. “conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity”; or finally,
6. to avoid a transaction reporting requirement under State or Federal law.

What are the penalties for money laudering?

Money laundering is almost always charged as a federal crime, because teh money has crossed state lines.  A conviction for money laudering under 18 U.S.C. § 1956 may result in up to 20 years imprisonment, as well as a fine of not more than $500,000, or twice the value of the property involved in the transaction, whichever is greater.  Specific penalties that may be imposed may vary depending on your particular case.

Money laundering is a very sophisticated criminal charge, and your lawyer needs to be experienced in federal criminal defense, as well as the specific substantive law of financial crime.   Simply receiving money from a bad source can expose you to serious criminal charges.  The good news, however, is there are specific defenses that can be used to defend against these charges if you are unwittingly caught up in someone else’s scheme.  This firm has a nationwide federal criminal defense practice.  Please call us at 601-991-1099 when you need our assistance.

Nobody likes to get served with papers.  Having served my share of legal documents over the years, I can state that nobody has ever invited me in to eat or to watch the game with them after I properly identified them and put the papers in their hand.  It is one of those things in life that is just not pleasant. 

No matter how disagreeable it might be, if you:

1. knowingly and willfully obstruct, resist, or oppose
2. any officer of the United States, or other person duly authorized
3.  in serving, or attempting to serve or execute, any legal or judicial writ or process of any court of the United States, or United States magistrate judge;

or you:

1. assault, beat, or wound any officer or other person duly authorized, knowing him to be such officer, or other person so duly authorized,
2. in serving or executing any such writ, rule, order, process, warrant, or other legal or judicial writ or process

You shall be fined or imprisoned for not more than one year, or both.  18 U.S.C. § 1501.  This crime is a federal misdemeanor, and the good news is that a federal judge has the power to grant probation for most misdemeanors.  18 U.S.C. § 3401(d).  Notice that this is the federal crime of assaulting a process server.  Mississippi state court is going to treat you differently for the same conduct if the process server is serving state court documents.

Leave the process server alone.  They didn’t sue you; they are just doing their job.

Extortion is the gaining of property or money by almost any kind of force, including threats of violence, property damage, harm to reputation, or unfavorable government action.  It is also sometimes referred to as “blackmail,” with a few minor distinctions.  It can be charged in either state or federal court, but this post is concerned with the federal extortion statutes. 

Federal statutes make many kinds of extortion or blackmail illegal. For example, it is illegal for federal officials to extort money in their official capacity (as part of their job).  18 U.S.C. § 872.  If you demand or receive something for not informing on someone that has violated federal law you have committed blackmail.  18 U.S.C. § 873.  If you make a threat with intent to extort, and your threat is mail or travels in interstate commerce – the internet qualifies - then you have violated 18 U.S.C. §§ 875–877.  There are several other statutes that make this type of behavior illegal, including the Hobbs Act, 18 U.S.C. § 1951, which prohibits racketeering in interstate commerce.  The act also prohibits robbery and extortion when these would affect interstate commerce.  If charged in federal court you will face substantial time and financial penalties, along with all of the baggage that comes with a federal conviction.  See this post and this post. 

So what is the difference between extortion and blackmail?

When you commit extortion, you are forcing someone to do something, usually to give up something, by threatening them.  When you blackmail someone you are obtaining something of value under the threat to disclose something shameful or disreputable about a person.  The difference is that extortion requires an independent criminal act, and blackmail does not. 

In fact, this leads to one of the more difficult concepts in criminal law – the law treats blackmail as if two rights make a wrong.  Let’s say you want a contract from a government agency, and you know the head of the agency is handling out these contracts in violation of goverment regulations.  So you threaten to expose the head of the agency unless they give you some of the contracts.  In that case, (1) you have a legal right to expose the wrongdoing, and (2) you have a legal right to go after the government contracts.  But if you exercise both of these rights together you have committed a crime!  And there is no victim!  What do you do?  You call a lawyer familiar with this area of the law; that’s what you do. 

A conviction for extortion or blackmail at the state or federal level may result in an extensive term of imprisonment, fines, and a number of lasting consequences for your career.  Even unsubstantiated allegations can cause irreparable damage if they are not addressed from the beginning.  If you believe the government is looking at you for extortion, blackmail, or any other white-collar crime, call me immediately at 601-991-1099, or send me an email to clarence@guthriefirm.com.  I’m here to help.

An FBI Agent in Oxford, Mississippi was indicted this week for making false official statements to a federal official, among other things.  The agent was the Supervisory Agent in Charge of the FBI’s Oxford Resident Agency, and the indictment charges that he failed to disclose that he had a financial interest in the Oxford FBI Building since 2004, and that he was not truthful on his Confidential Financial Disclosure Report that FBI Agents are required to fill out.  Finally, it is alleged that he knowingly and willfully made, and caused to be made, a materially false and fraudulent statement and representation to an agent of the Department of Justice, Office of the Inspector General, during an interview.  This is a big case, and if you happen to be reading this while doing research for your term paper on irony it’s the best example I’ve ever seen.

Under Title 18, United States Code, Section 1001, it is a crime to:

1. knowingly and willfully;
2. make any materially false, fictitious or fraudulent statement or representation;
3. in any matter within the jurisdiction of the executive, legislative or judicial branch of the United States.

This was the charge that Martha Stewart served time for.  It is a crime to tell a lie to the federal government.  Even if your lie is oral and not under oath, and even if you have received no Miranda warnings of any kind.  You must know that your statement is false at the time you make it, but you do not have to know that lying to the government is a crime.  Any person convicted under this statute faces statutory penalties of a possible fine, and up to 5-8 years in prison. 

This law, and interpretations of it, can become extremely complex very quicky, especially in a white-collar crime context.  If you are approached by federal agents asking to speak with you, your best course of action is to politely decline to speak with them about anything substantive in the absence of counsel.  This is much harder than it sounds.  Here are some possible responses from the agent:

• “Why do you think you need counsel?”
• “Why won’t you speak with me to clear this up?”
• “What do you have to hide?”
• “Well, get ready for a subpoena, or an indictment.”

Your responses:

• “May I have your card?  My attorney will be contacting you.”
• “May I please speak with my attorney first.”
• “I want a lawyer.”
• “I would like to speak with a lawyer.”

In summary, it is a sad fact that the government applies a far higher moral standard to you than to itself.  Law enforcement officers can lie to you to get you to make a statement, but you cannot lie to them.  And know this: the federal government can send you to prison for telling a lie, even though they could never charge you with any other crime.

If you get into a tight spot with federal agents, have them wait a few minutes and give me a call.

Because bankruptcy law is federal law in the United States, most crimes related to bankruptcy are prosecuted in federal court.  Bankruptcy is a legal process whereby a business or individual is allowed to discharge most or all of their debts due to an inability to pay.  Your property is liquidated and divided among your creditors to pay your debts, and you are allowed to “start over,” (although with bad credit).  But if you falsely claim bankruptcy, attempt to conceal your assets from creditors, file mulitple claims, or get involved in a “petition mill” scheme, you are committing bankruptcy fraud – a federal offense.

Title 18, Section 152 of the United States Code is the main bankruptcy fraud statute, and the nine paragraphs of this statute prohibit the following activities:

1. concealment of property belonging to the estate of a debtor;
2. making false oaths or accounts in relation to any case under Title 11;
3. making of a false declaration, certificate, verification or statement under penalty of perjury as permitted under Section 1746 of Title 28 or in relation to any case under Title 11;
4. making false claims against the estate of a debtor;
5.  fraudulent receipt of property from a debtor;
6.  Bribery and extortion in connection with a case under Title 11;
7.  transfer or concealment of property in contemplation of a case under Title 11;
8.  concealment or destruction of documents relating to the property or affairs of a debtor; and
9.  withholding of documents from the administrators of a case under Title 11.

The most common types of bankruptcy fraud involve concealment of assets, multiple filings, or petition mills.

Concealing assets accounts for nearly 70 percent of all bankruptcy fraud committed in the United States.  If you purposely fail to list every one of your assets on your bankruptcy claim, knowing that creditors cannot come get assets that they do not know about, then you have fraudulently concealed these assets.  Similarly, businesses frequently conceal assets when filing for Chapter 11 bankruptcy by transferring money or properties to their relatives or other outside interests so that the assets cannot be confiscated.

Multiple filing fraud takes place when you file for bankruptcy in more than one state, using different combinations of real and false information (name, address, social security number) to file the claims.  You may list the same assets on each claim, but deliberately fail to include every asset.  This, like concealment of assets, fraudulently protects your valuables from total liquidation.

Finally, ”petition mill” schemes are unfortunately on the rise in these economic times.   These schemes claim to help financially strapped tenants keep their house and not get foreclosed and evicted.  Typically, ads are run in the paper and online offering counseling on how to avoid eviction.  Once the person is signed up, this “service” then files bankruptcy in the tenant’s name.  It then charges outlandish fees and drags the case out for months, draining savings accounts, ruining credit, and merely postponing the inevitable eviction.

If you are indicted for bankruptcy fraud, each count carries a maximum statutory penalty of five years in prison and a $250,000 fine.  Any sentence following conviction, however, would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.