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Monetary Transactions

Title 18 U.S. Code § 1957 - Monetary Transactions in Property Derived from Specified Unlawful Activity

Among the federal statutes dealing with money laundering and racketeering found in Chapter 95 of the U.S. Code, it is a federal crime to knowingly use criminally derived money in a bank-involved monetary transaction of $10,000 or more defined under Title 18 U.S.C. 1957.

Monetary Transactions in Property Derived from Specified Unlawful Activity - Title 18 U.S. Code § 1957

If you're charged with a crime under this law, you could face up to 10 years in federal prison if convicted.

18 U.S.C. 1957 says, “(a) Whoever, in any of the circumstances outlined in subsection (d), knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).”

Subsection (b) says that the punishment for violating this federal statute carries a fine or prison time of up to ten years or both.

Subsection (c) says that in prosecuting this federal law, the government prosecutor does not have to prove the defendant knew that the criminally derived property was acquired from specified illegal activity.

However, they must prove that the crime occurred within the territorial jurisdiction of the United States, or if outside the country, they are a “United States person.”  Let's review this federal law in more detail below.

Overview of 18 U.S.C. 1957

This law is often compared to its counterpart, 18 U.S.C. 1956, which discusses the elements of money laundering in detail.

 18 U.S.C. 1956 Federal Money Laundering

Specifically, the following key elements must be in place for you to be convicted of a crime under 18 U.S.C. 1957:

  • You knowingly engaged in a "monetary transaction" involving funds that were derived from a "specified unlawful activity" or attempted to do so;
  • The monetary transaction involved a financial institution, such as a bank; and
  • The amount of the transaction exceeded $10,000.

To understand the significance of this law, we must also understand that 18 U.S.C. 1956 revolves around four possible intents of money laundering:

  • The intent to promote continued illegal activities;
  • The intent to evade paying taxes;
  • The intent to conceal the nature or source of the funds; and
  • The intent to avoid reporting requirements.

With 18 U.S.C. 1957, prosecutors don't have the burden of proving any of these four intents to get a conviction.

They also don't have to prove you knew the specific crime that generated the funds. Instead, they only need to prove that the transaction involved a bank, that the transaction exceeded $10,000, and that you knew that the funds derived from some criminal activity.

For this reason, federal prosecutors use this law to charge defendants suspected of money laundering when they don't have enough evidence to prove the defendant's intent. Other things to know about this law:

  • For purposes of this law, a "monetary transaction" refers to a deposit, withdrawal, exchange, or transfer of funds related to interstate or foreign commerce and involving a financial institution;
  • "Specified unlawful activity" refers to a long list of criminal activities in 18 U.S.C. 1956. The list includes various types of fraud, drug trafficking, sex trafficking, bribery, corruption, embezzlement, and many others;
  • This law is enforceable within the United States, any of its territories, or maritime jurisdiction, or when committed by a United States person anywhere in the world.

What is an Example?

George is an accountant who does some side work for an organization he knows to be involved with organized crime. He deposits $100,000 on behalf of the organization into the bank account of a shell company he created.

Regardless of whether prosecutors can prove he was trying to conceal the money, George can be charged under 18 U.S.C. 1957 for making a bank deposit of more than $10,000 with funds he knew to be the profits of criminal activity.

Who Investigates Violations?

Subsection (e) says that the following federal agencies can investigate alleged violations of 18 U.S.C. 1957:

  • Department of Justice;
  • Department of the Treasury;
  • Department of Homeland Security;
  • United States Postal Service.

What Are the Related Federal Statutes?

18 U.S. Code Chapter 95 Racketeering has several federal laws that are related to 18 U.S.C. 1957 engaging in monetary transactions in property derived from specified unlawful activity, including the following:

  • 18 U.S.C. 1951 – Interference with commerce by threats or violence;
  • 18 U.S.C. 1952 – Interstate travel in aid of racketeering enterprises;
  • 18 U.S.C. 1953 – Interstate transportation of wagering paraphernalia;
  • 18 U.S.C. 1954 – Offer to influence employee benefit plan operations;
  • 18 U.S.C. 1955 – Prohibition of illegal gambling businesses;
  • 18 U.S.C. 1956 – Laundering of monetary instruments;
  • 18 U.S.C. 1958 – Use of commerce facilities in murder-for-hire;
  • 18 U.S.C. 1959 – Violent crimes in aid of racketeering activity;
  • 18 U.S.C. 1960 – Unlicensed money-transmitting businesses.

What Are the Penalties for 18 U.S.C. 1957?

The penalties for violating 18 U.S.C. 1957 can be severe. If convicted, you could face the standard maximum penalties:

  • Up to 10 years in federal prison (per offense); and
  • A fine of up to $250,000.

As an alternative to the $250,000 fine, the federal judge may impose an alternate fine equal to up to twice the amount of the criminally derived property involved in the illegal transaction.

So, for example, if you transacted $500,000 of funds derived from criminal activity, the judge can fine you up to $1 million.

Further, the statute says that if “the offense involves a pre-retail medical product, as defined in section 670, the punishment shall be the same unless the punishment under this subsection is greater.”

What Are the Defenses for 18 U.S.C. 1957?

While it can be challenging to raise an effective defense against 18 U.S.C. 1957 charges, it is still possible for a skilled federal criminal defense attorney to implement one or more defense strategies, which are discussed below.

Federal Criminal Defense Lawyers

Perhaps we can argue that you did not know the origin of the funds. However, while 18 U.S.C. 1957 is written to reduce the prosecution's need to prove your intent concerning alleged money laundering, they must still prove that you had a minimum knowledge that the money was criminally derived.

If we can show that you genuinely didn't know that the money came from criminal activity, you can't be convicted of this crime.

Perhaps we can argue that the funds derived from the criminal activity were less than $10,000. You might use this defense if the funds involved in the transaction were not all derived from unlawful activities.

For example, suppose you made a total withdrawal of $50,000 from a bank but knew only $5000 was derived from criminal activities. In that case, your attorney could argue that the withdrawal doesn't meet the $10,000 threshold for a conviction under 18 U.S.C. 1957.

If you want to review your case details and legal options, you can contact us by phone or using the contact form. We provide legal representation for federal criminal matters across the United States. Eisner Gorin LLP is located in Los Angeles, California.

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