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Financial Crimes Enterprise

Title 18 U.S. Code § 225 - Continuing Financial Crimes Enterprise

If four or more people act in concert to continually violate specific financial-related federal statutes, it constitutes what is known as a Continuing Financial Crimes Enterprise (CFCE).

Under Title 18 U.S. Code 225, federal law imposes strict and severe penalties on defendants who are identified as being part of a CFCE.

Continuing Financial Crimes Enterprise - 18 U.S.C. § 225

You could face up to $10 million in fines, $20 million for organizations, and a minimum of 10 years to life in federal prison if convicted of this crime.

18 U.S.C. 225 says, “Whoever (1) organizes, manages, or supervises a continuing financial crimes enterprise; and (2) receives $5,000,000 or more in gross receipts from such enterprise during any 24-month period, shall be fined and imprisoned….”

Subsection (b) says, “For purposes of subsection (a), the term “continuing financial crimes enterprise” means a series of violations under section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or 1344 of this title, or section 1341 or 1343 affecting a financial institution, committed by at least four persons acting in concert.”

If you face allegations of violating 18 U.S.C. 225 continuing financial crimes enterprise, you face severe penalties, such as huge fines and time in the Federal Bureau of Prisons (BOP).

Without consulting with a lawyer, it would be best if you did not speak with federal law enforcement agents, such as the Federal Bureau of Investigation (FBI). Let's review this federal law in more detail below.

What is the Background of 18 U.S.C. 225?

Title 18 U.S.C. 225 is the codification of a portion of a law passed by Congress in 1990.

Federal Bank Fraud Defense Lawyers

It's known as the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act.

This law was passed in the wake of the savings and loan crisis of the 1980s to hold bad actors accountable for the financial misconduct that led to the crisis.

The Continuing Financial Crimes Enterprise statute contained within this act is effectively the text of 18 U.S.C. 225 today.

This statute identifies a CFCE as a new criminal entity that some think of as a "white-collar" cousin of a Continuing Criminal Enterprise (or CCE, see 18 U.S.C. 848).

Unlike CCEs, which are involved in long-term, large-scale drug trafficking, a CFCE is engaged in repetitive breaches of federal laws governing financial institutions.

What Does the Law Say?

Title 18 U.S.C. 225 makes it a federal crime to engage in a CFCE. Specifically, it targets anyone who "organizes, manages, or supervises a continuing financial crimes enterprise."

Further, the statutory language says anyone who "receives $5,000,000 or more in gross receipts from such enterprise during any 24-month period."

Those convicted of doing so are subject to severe fines and extended prison sentences under this law.

What Constitutes a Criminal Financial Crimes Enterprise?

18 U.S.C. 225 identifies a CFCE as "at least four persons acting in concert" to commit "a series of violations" of any of the following federal laws:

  • Receipt of commissions or gifts for procuring loans defined under 18 U.S.C. 215;
  • Theft, embezzlement, or misapplication by a bank officer or employee defined under 18 U.S.C. 656;
  • Embezzlement/misapplication of funds within lending, credit, and insurance institutions defined under 18 U.S.C. 657;
  • Making false or unauthorized bank entries, reports, or transactions defined under 18 U.S.C. 1005;
  • Making false or unauthorized entries, reports, or transactions within a federal credit institution defined under 18 U.S.C. 1006;
  • Making false, forged, or counterfeit statements to fraudulently influence the FDIC defined under 18 U.S.C. 1007;
  • Various violations defined under 18 U.S.C. 1014;
  • Concealment of assets from conservator, receiver, or liquidating agent defined under 18 U.S.C. 1032;
  • Committing bank fraud defined under 18 U.S.C. 1344;
  • Defrauding a financial institution in violation of 18 U.S.C. 1341;
  • Wire, radio, or television fraud affecting a financial institution defined under 18 U.S.C. 1343.

What Are Some Examples?

EXAMPLE 1: David convinces 10 of his friends in the banking sector to embark on a scheme to systematically divert funds from their respective institutions into dummy overseas accounts where they will later divide the funds equally.

Together, they divert about $7 million in one year. David can be charged under 18 U.S.C. 225 because he supervises an effort that qualifies as a Continuing Financial Crimes Enterprise.

EXAMPLE 2: Fred and Ethel conspire to embezzle about $2 million from the bank where they work. While they may be charged with several federal crimes, including 18 U.S.C. 656, embezzlement by a bank officer or employee, they would NOT be charged under 18 U.S.C. 225 because their activities do not rise to the level of a CFCE.

What Are the Related Federal Offenses?

18 U.S. Code Chapter 11, bribery, graft, and conflicts of interest have several federal laws that are related to 18 U.S.C. 225 continuing financial crimes enterprise, including the following:   

  • 18 U.S.C. 201 - Bribery of public officials and witnesses;
  • 18 U.S.C. 202 - Definitions;
  • 18 U.S.C. 203 - Compensation to members of congress;
  • 18 U.S.C. 204 - Practice in United States Court of federal claims;
  • 18 U.S.C. 205 - Activities of officers and employees in claims;
  • 18 U.S.C. 206 - Exemption of retired officers of the services;
  • 18 U.S.C. 207 - Restrictions on former officers, elected officials;
  • 18 U.S.C. 208 - Acts affecting a personal financial interest;
  • 18 U.S.C. 209 - Salary of government officials and employees;
  • 18 U.S.C. 210 - Offer to procure appointive public office;
  • 18 U.S.C. 211 - Solicitation to obtain appointive public office;
  • 18 U.S.C. 212 - Offer of gratuity to financial institution examiner;
  • 18 U.S.C. 213 - Acceptance of gratuity by the financial examiner;
  • 18 U.S.C. 214 - Offer for procurement of Federal Reserve bank loan;
  • 18 U.S.C. 215 - Receipt of commissions or gifts for procuring loans;
  • 18 U.S.C. 216 - Penalties and injunctions;
  • 18 U.S.C. 217 - Acceptance of consideration for farm indebtedness;
  • 18 U.S.C. 218 - Voiding transactions in violation of chapter;
  • 18 U.S.C. 219 - Officers acting as agents of foreign principals;
  • 18 U.S.C. 220 - Illegal remunerations referrals to recovery homes;
  • 18 U.S.C. 224 - Bribery in sporting contests;
  • 18 U.S.C. 226 - Bribery affecting port security;
  • 18 U.S.C. 227 - Wrongfully influencing a private entity's employment decisions by a member of congress or executive branch employee.

What Are the Penalties for 18 U.S.C. 225?

Participating in a Continuing Financial Crimes Enterprise can garner severe penalties and fines. If you're convicted under U.S.C. 225, you could face the following:

  • Up to $10 million in fines for an individual; OR
  • Up to $20 million in fines for an organization); AND
  • A prison term of at least ten years and possibly life in prison.

What Are the Defenses Against 18 U.S.C. 225?

Being charged with continuing financial crimes enterprise is a serious matter that may result in excessive penalties if convicted.

Fortunately, there are certain defenses a skilled federal criminal defense attorney may employ. Some of them are discussed below.

Federal Continuing Financial Crimes Enterprise Charges

Perhaps we can argue that you were not supervising a CFCE. Maybe you committed certain financial crimes, but you acted alone, or your proceeds didn't meet the criteria of a CFCE. Of note is that this defense is used primarily to negotiate for lesser charges.

Perhaps we can argue that you were unaware of illegal activity. For example, suppose you were working under an individual who was part of a CFCE.

In that case, proving that you acted on your superior's orders and didn't realize you were diverting funds illegally may be possible. Perhaps we can negotiate with the federal prosecutor for a favorable plea bargain.

You can contact our law firm for an initial examination of all the case details and legal options by phone or using the contact form.

We offer legal representation on federal criminal issues throughout the United States. Eisner Gorin LLP is based in Los Angeles, California.

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