Research paper presentation: Laundering of Monetary instruments Title 18 U.S.C 1956 Date: October 9, 2014
1. What are monetary instruments?
Coin or currency of united states or any other country
Traveler’s check (sold for cash in unusual amounts), personal Checks, bank checks and money orders. Investment securities and negotiable instruments (in bearer form or otherwise) (Form- Title passes upon delivery) In case of bearer securities or bills of exchange do not require that the owner be registered with an issuer or a transfer agent. Bills of exchange can be payable on sight or at a future date and can be transferred by making an endorsement or signature Ease of transfer and redemption
2. What is money laundering?
Money laundering is the process whereby the proceeds of crime are transformed into ostensibly legitimate money or other assets. Aimed to conceal the identity, source, and destination of illicitly-obtained money. 3. What does the statute say?
Title 18 U.S. Code 1956 outlaws four kinds of laundering: promotional, concealment, structuring, and tax evasion (committed under one of the three conditions financial transactions, international transfers, stings). Financial transactions:
Knowing that the property involved in the FT represents proceeds from specified unlawful activity conducts or attempts to conduct such a financial transaction with intent to promote the carrying on of the SUA or conceal the source, ownership, nature of the proceeds. International Transfers:
Anyone who transfers or attempts to transfer a monetary instrument or funds from a place in the U.S to or through a place outside the U.S or to a place in the U.S from or through a place outside U.S with an intent to promote the carrying on of the SUA or conceal the source, ownership, nature of proceeds. Undercover Operations
Variation of the financial transaction offense, created to cover situations in which law enforcement officials acting undercover have duped the offender into believing the agent is using the proceeds from a criminal source to promote a predicate offense when in fact he is not. Outlaws both completed offense and the attempt to commit it. The defendant’s action should constitute a substantial step towards the commission of a completed offense. 4. Penalties
Fine of not more than $500,000 or twice the value of property involved in the transaction whichever is greater, or imprisonment of not more than 20 years, or both. International Transfer
Fine of not more than $500,000 or twice the value of monetary instrument or funds involved in the transfer whichever is greater, or imprisonment of not more than 20 years, or both. Undercover Operations
Fined or imprisoned for not more than 20 years or both.
Civil Penalty in addition to above, anyone who violates any of the provision liable for the civil penalty of not more than the greater of A. the value of property, funds, or monetary instruments involved in the transaction or B. $10,000.
5. Stages of Money Laundering
Placement: First stage of the money laundering process in which physical currency enters the financial system. Illegal funds are placed into financial institutions through deposits, wire transfers. Usually by breaking up large amounts of cash into less conspicuous and smaller amounts before they are inserted into the system. Repayment of loans, gambling, currency smuggling, currency exchanges, blending funds. Layering: Funds must be moved to several destinations to reduce the possibility of detection. The placed funds are distanced from the illegal origins. Using multiple bank accounts, people acting as intermediaries, transacting through corporations and trusts. Shuttled through web of many accounts, companies and countries to disguise the origin. Integration: Now the funds become available to be used and controlled as apparently legitimate funds and criminals place those funds back into the economy. By this stage, the illegal origin has...
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