Chicago Money Laundering Attorney
The attitude of law enforcement is one of the biggest differences between how state and federal crimes are handled in Illinois. Usually, state and local authorities are reactive. They only prosecute defendants who are caught in flagrante delicto (red-handed). Lengthy investigations are rare.
Federal law enforcement officers are much more proactive. Long investigations are the norm. Frequently, defendants have no idea they are in trouble until authorities serve search or arrest warrants. By that time, court prosecutions are inevitable.
Investigating agencies include the FBI, DEA, ATF, IRS, HUD, HHS, and local law enforcement. These agencies employ a slew of investigative techniques, including modern technological methods, such as cell-site simulators, government malware, and digital forensic searches, among many others, that need to be attacked by an experienced federal criminal defense attorney.
Final punishment is another big difference between state and federal criminal systems. State court defendants usually serve their sentences in facilities that are close to home. Additionally, most of these inmates are eligible for early release.
The bottom line is that federal cases are much more complex than state cases. They have different rules and procedures. Also, the penalties are more severe, including longer prison sentences and steeper fines. Furthermore, federal criminal accusations alone can damage your personal and/or professional reputation beyond repair.
At the Law Offices of Vadim A. Glozman, we focus primarily on representing individuals who are caught up in a federal investigation or prosecution. We represent individuals around the country throughout all stages of federal litigation, including grand jury investigations, verdicts, sentencing, and appeals. We are dedicated to providing zealous representation from the beginning of your case through the end.
Elements of a Money Laundering Crime
Overall, money laundering, at both the federal and state levels, is taking tainted funds and transforming them into property that appears legitimate. Prosecutors must prove a mental element at each point. The defendant must know that the money is illegal, and the property transfer process must be intended to clean these funds. This process has three separate stages:
- Placement: The IRS requires banks and other financial institutions to report suspicious transactions, such as cash or cash-equivalent transactions (mostly money orders and cashier’s checks) above $10,000. To avoid raising this red flag, most money launderers use smurfs. Smaller deposits and electronic deposits aren’t subject to reporting rules. Recently, many smurfs and money launderers have begun using unsupervised and non-bank informal value transfer systems. Eventually, regulators will most likely close this loophole.
- Layering: This activity is most closely associated with money laundering. Malefactors usually invest funds with shell corporations, scatter them into different accounts, or use them to buy large durable goods, like yachts and houses. Until recently, foreign layering activities were almost impossible to trace. However, most foreign banks and financial institutions now give account information to the IRS.
- Integration: The final step in the money laundering process is basically legitimizing the funds. Usually, this phase involves transforming cash into non-cash. Examples include real estate investments, securities purchases, and durable goods purchases. If a money launderer gets to this last phase, the crime is difficult to prove in court. However, investigators hardly ever let malefactors get this far.
The money laundering process is constantly evolving. When regulators get wise to one activity, evildoers shift to another one until they get caught, and the dance goes on.
All that being said, most of the defendants our Chicago money laundering attorneys represent are not bad people. In fact, most of them have no idea they were doing something illegal until investigators close in on them.
In court, prosecutors must establish all money laundering phases. As mentioned, they must also prove the required mental state in each phase. In addition to transactional red flags, investigators often focus on institutional or locational red flags. These include:
- Gambling: Casinos usually don’t ask many questions about the source of funds. People can pay cash for poker chips and exchange those chips for a check. Sometimes, casinos even approve credit transfers to sister facilities, making the money trail even harder to follow.
- Cash Smuggling: Anti-money laundering laws have increased cash smuggling. Launderers or accomplices simply move cash across international or state lines. Therefore, law enforcement officers often detain motorists who have out-of-state license plates, drive suspiciously, or otherwise “don’t look right.” These stops often don’t hold up in court. More on that below.
- Life Insurance Policies: The insurance industry is not as well-regulated as other financial sectors. Frequently, money launderers buy insurance policies, hold them for a few months, or even a few years, then cash out the policies. Other times, they use the life insurance policy as loan collateral. That’s illegal as well, even though there is no property transfer.
Investigators also scrutinize large real estate transactions and currency exchange bureau transactions. These activities are not quite as common. Investigators usually assume that large real estate transactions, especially if they involve cash, feature laundered funds. And, currency exchange bureaus charge significant service fees.
Money laundering is almost always a federal crime. If the money crosses state lines, even for a moment, the matter becomes a federal offense.
Sections 1956 and 1957 of the United States Code are the primary money laundering federal statutes. Section 1956(a)(1) covers domestic money laundering transactions. It applies if the accused“conduct[s] or attempt[s] to conduct a financial transaction, knowing that the property involved in the financial transaction represents the proceeds of some unlawful activity.” Furthermore, “the property must in fact be derived from a specified unlawful activity.”
Domestic money laundering is a specific intent crime. In addition to the general intent described above, the defendant must usually intend to circumvent reporting requirements or tax laws. This specific intent is difficult to prove in court. Many people are aware that the transaction is illegal, but they do not know why it’s illegal.
Section (a)(2) is the international money laundering provision. Section (a)(3) is the “sting” provision. People cannot launder funds provided by undercover federal agents. The maximum criminal penalty for any Section 1956 violation, regardless of the amount of the transaction, is twenty years in prison.
Section 1957 criminalizes money laundering activities valued at more than $10,000. Usually, federal prosecutors can add related transactions together to reach the $10k threshold. Prosecutors prefer this statute because the required mental state is easier to prove. Basically, Section 1957 is not a specific intent crime. Each violation could mean ten years in federal prison.
720 ILCS 5/Art. 29B, the state money laundering statute, is a lot like Section 1956, with one notable exception. Prosecutors must establish that the defendant knew, or should have known, that the transaction is designed “to conceal or disguise the nature, the location, the source, the ownership or the control of the criminally derived property.” At a minimum, money laundering in Illinois is a Class 3 felony. The penalties increase significantly if the amount is over $10,000.
Money laundering defendants could face both state and federal charges for the same transaction. Courts liberally apply the separate sovereignties exception to the Fifth Amendment’s double jeopardy clause.
Fourth Amendment detention, search, and seizure defenses are often available in money laundering cases.
Officers must have reasonable suspicion to detain suspects on the road, at a bank, or anywhere else. Basically, reasonable suspicion is an evidence-based hunch. An unusually large amount of cash is, well, unusual. But that fact, by itself, probably does not constitute reasonable suspicion. Similarly, many motorists are nervous when police officers pull them over. That doesn’t mean they are doing something illegal.
If the initial detention is illegal, the arrest is also illegal. So is any evidence investigators obtain as a result of the detention or arrest. In other words, in most cases, the state collapses like a house of cards.
The standard of proof is even higher regarding searches and seizures. Normally, officers must have probable cause before they can seize cash or property, or before they can review financial records. Legally, probable cause is between reasonable suspicion and beyond a reasonable doubt, which is the standard of proof at trial.
Regarding substantive defenses, as mentioned above, specific intent crimes are difficult to prove in court. Normally, prosecutors can use conduct to establish intent. If Miguel hit Ramon with a baseball bat, Miguel more than likely intended to seriously hurt Ramon. But a Section 1956 money laundering case essentially requires federal prosecutors to prove that Miguel knew he hit Ramon with a Louisville Slugger. So, Miguel’s conduct is not enough to prove the required mental state.
Legal defenses help Chicago money laundering attorneys successfully resolve criminal cases. However, an attorney’s job normally does not end once the judge’s gavel falls.
730 ILCS 5/5-6-4(f) gives judges almost unlimited discretion to modify “conditions of probation, of conditional discharge, of supervision, or of a sentence of county impact incarceration.” Theoretically, a judge could sentence Tony to probation on Monday. On Tuesday, the judge could end Tony’s probation. Some judges even allow defendants to withdraw their guilty pleas in these situations. So, it’s like the offense never happened.
However, as mentioned above, most judges have informal rules in this area. Typical requirements include successful completion of at least half the probationary period, full payment of all fines and restitution, and completion of all required classes or other obligations.
Furthermore, a Chicago money laundering attorney must normally establish that early discharge specifically benefits the defendant and does not endanger the public. Different rules apply to federal early discharge from probation, primarily because of the Federal Sentencing Act.
Other post-conviction issues include expungement and executive pardon. Expungement, or sealing, is often available in non-violent crimes. This is especially true if the defendant had no prior criminal record. Executive pardons are not just for the rich and powerful. If an attorney properly presents the request, and the matter jives with the president’s or governor’s political agenda, the chances of at least a partial pardon are rather high.
Contact a Dedicated Cook County Money Laundering Defense Attorney
Money laundering criminal charges are frightening, but a number of successful resolutions are available. For a confidential consultation with an experienced money laundering defense lawyer in Chicago, contact The Law Offices of Vadim A. Glozman by calling 312-726-2015. Home, virtual, and after-hours visits are available.
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