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Money Laundering

Have you been charged with the criminal offense of money laundering or has your loved one been arrested for money laundering?

If you are in any of these situations, you will need a competent and highly experienced criminal defense attorney to represent you in court. This is because law enforcement agencies in Arizona take the offense of money laundering very seriously, and it attracts serious penalties.

We at the Phoenix Criminal Attorney have extensive experience in defending individuals who have been charged with money laundering. Get in touch with us if you or your loved one is facing money laundering charges.

What is Money Laundering?

The term 'money laundering' refers to the process of converting money derived from unlawful activities into 'clean money.' Most individuals who want to hide their illegal sources of income are highly likely to be involved in money laundering.

Often, money laundering involves a series of complex transactions or businesses. Its end result is that the money appears to be legitimately earned.

Due to money laundering, the United States loses billions of dollars every year. This is why law enforcement agencies take it extremely seriously.

Note that money laundering is criminalized both under Federal Law and Arizona State Law. This means that you can be charged with this offense under two separate legal systems.

History of Money Laundering

The United States was the first country globally to enact laws criminalizing money laundering. Initially, money laundering laws were enacted specifically to combat criminal organizations, such as the Mafia. Nowadays, the focus of law enforcement agencies has shifted to drug crimes and terrorism activities.

One of the first laws against money laundering in the United States was the Bank Secrecy Act, enacted in the 1970s. This law required banks to report large and suspicious cash transactions.

In 1986, the Money Laundering Control Act came into force. This law prohibited individuals from taking part in financial transactions involving the proceeds of crime. More severe penalties were introduced with the Annunzio-Wylie Anti-Money Laundering Act, which was enacted in 1992. The Money Laundering Suppression Act of 1994 and the Money Laundering and Financial Crimes Strategy Act of 1998 strengthened investigation procedures for money laundering. In 2001, Congress enacted the Patriot Act, which contained extensive provisions against money laundering. With the enactment of these Federal laws, State Governments, including Arizona, began to criminalize money laundering within their respective jurisdictions.

Money Laundering Investigating Authorities

Several law enforcement agencies in Arizona are mandated to investigate money laundering activities. Besides the Arizona Police Department, there is the FBI and the IRS.

Moreover, there are international agencies that have been specifically created to investigate money laundering activities. For instance, the International Money-Laundering Information Network (IMoLIN) is a United Nations Organization whose mandate is to investigate money laundering activities globally.

There is also the Financial Action Task Force on Money Laundering (FATF), which was established by the G7. One of the key functions of this organization is to cut off illicit cash flows to terrorist groups.

If you believe that you are under investigation for money laundering activities, the best thing to do is to contact an experienced and reputable criminal defense attorney as soon as possible. This way, you will receive legal advice on the best steps to take.

Arizona Money Laundering Laws

The principal law that criminalizes money laundering in Arizona is Criminal Code 13-2317. This law categorizes money laundering into first degree, second degree, and third degree.

According to Arizona Criminal Code 13-2317, a person commits the criminal offense of first-degree money laundering if he/she knowingly initiates, plans, organizes, finances, supervises, manages, or directs or is in the business of money laundering to facilitate murder or terrorism. In comparison to second-degree and third-degree money laundering, first-degree money laundering has the most grievous penalties. First-degree money laundering is categorized as a class 2 felony.

The major difference between first-degree money laundering and second-degree and third-degree money laundering is that first-degree money laundering involves facilitating the commission of murder or terrorism. This is why it has the most grievous penalties.

As highlighted in Arizona Criminal Code 13-2317, second-degree money laundering encompasses all acts of making money through illegal businesses and concealing it to appear as legitimately earned, such as:

  • Acquiring or maintaining an interest in, transacting, transferring, transporting, receiving, or concealing the nature or existence of racketeering proceeds with the knowledge that they have been derived from unlawful activities
  • Transporting goods, items, or money to another person with knowledge that they are intended to be used in unlawful activities
  • Conducting a transaction with belief or having reason to believe that the property was derived from unlawful activities
  • Knowingly or intentionally evading a reporting requirement under Federal law
  • Intentionally or knowingly providing false information or failing to disclose information that results in the failure to file a record or report required under Federal law or filing such record or report with misstatements of fact or material omissions
  • Intentionally or knowingly falsifying, concealing, covering up, or misrepresenting any person's identity in connection with a financial transaction

Second-degree money laundering is categorized as a class 3 felony. It has more grievous penalties than third-degree money laundering.

A person commits the offense of third-degree money laundering if he/she is involved in the transmission of money or any item of value to influence or reward a person for doing a particular act. Third-degree money laundering is categorized as a class 6 felony.

Elements of Money Laundering

Money laundering is a fact-specific and complex crime. The elements that the Prosecution must prove for an individual to be convicted vary depending on the unique facts pertinent to the case.

However, in most cases, the Prosecution must prove the following three elements:

  • Being involved in an unlawful activity
  • Knowledge
  • Intention to conceal or hide

The Prosecutor must adduce sufficient evidence showing that you were involved in unlawful activity. In most cases, individuals charged with money laundering usually face more criminal charges for other unlawful activities. For instance, a person charged with money laundering may also face charges for drug trafficking if the Prosecutor believes that he/she illegally obtained his/her money from selling and transporting narcotics.

The Prosecutor must also prove that you knew the money, items, or goods were proceeds from unlawful activities or they were to be used in unlawful activities. Therefore, if you can adduce evidence showing that you did not know that the money was derived from illegal activities, you will be acquitted.

Finally, the Prosecution must show that you had a willful intention to hide or conceal the illegally obtained money. If you had no such intention, you would be acquitted.

In Arizona, the standard of proof in criminal cases is beyond a reasonable doubt. Often, Prosecutors usually find it difficult to reach this high standard. As a result, the defendants are acquitted.

Penalties for Money Laundering

The penalties for money laundering vary depending on whether you've been charged with first-degree, second-degree, or third-degree money laundering. Generally, money laundering is classified as a felony.

The penalty for first-degree money laundering is an imprisonment term not exceeding 12.5 years, while that for second-degree money laundering is an imprisonment term of up to 8.75 years. A conviction for third-degree money laundering attracts an imprisonment term of up to 6 years or a fine of not less than $2000 or 3 times the value of the subject matter, whichever is greater.

Note that these penalties are only applicable if you've been convicted as a first-time offender. Second-time and third-time money laundering usually attract more grievous penalties. Moreover, if there is evidence showing that you 'laundered' $100,000 or more during one year, you will be fined three times the amount of money involved.

Legal Defenses to Money Laundering

There are several legal defenses that you can use to fight money laundering charges. Some of them include:

  • Entrapment
  • Duress
  • Lack of intent
  • Lack of knowledge
  • Illegal search
  • Incorrect calculation of the ‘laundered’ amount
  • The act described is not money laundering
  • The property was not derived from any unlawful activity

Here is a brief explanation of each of these defenses:

1.       Entrapment

In Arizona, evidence acquired through entrapment is inadmissible. However, law enforcement agencies, especially undercover cops, still use entrapment techniques to gather and collect evidence during money laundering investigations. This is why entrapment is one of the most common defenses to money laundering charges.

The defense of entrapment is based on the interaction between the law enforcement officer and the police officer before and during the commission of the offense. Suppose a police officer used coercion and any other overbearing tactic to induce you to be involved in a money-laundering activity. In that case, you can use this defense to fight your charges.

2.       Duress

Sometimes, you may have gotten involved in money laundering unwillingly. For instance, someone may have forced you to engage in money laundering by threatening that he/she would kill your loved ones.

If you are in this situation, you can use the defense of duress to fight your charges. However, you must have sufficient evidence showing that you were forced to engage in money laundering activities.

3.       Lack of Intent

Intent is one of the key elements of money laundering. If you can show that you had no willful intent to ‘launder’ money, you would be acquitted.

The Prosecutor must have sufficient evidence showing that you had an intention to hide or conceal money obtained from the proceeds of crime. Often, this is not the case. Remember, the Prosecutor must prove each element of the crime beyond a reasonable doubt. If he/she is not able to do so, you will be acquitted.

4.       Lack of Knowledge

Just like the defense of lack of intent, if the Prosecution does not have sufficient proof showing that you knew that the 'laundered' amount was derived from the proceeds of crime, you would be acquitted. You could use this defense if you believed that the money was legitimately earned.

If you opt for this defense, you'd have to adduce evidence showing that you had an honest belief that the money was derived from lawful activities. For example, you can adduce correspondence between you and other individuals involved in the money laundering activity. Or, you can have witnesses who will testify on your behalf that someone else fooled you into believing that the money was not derived from criminal activities. Either way, you will need a highly experienced and competent criminal defense attorney to help you.

5.       Illegal Search

In Arizona, evidence acquired through illegal searches is inadmissible. However, law enforcement agencies still conduct illegal searches when investigating money laundering activities.

As a general rule, you should never permit a law enforcement officer to carry out a search on your person or items without him/her producing a search warrant. Searches conducted without search warrants are unlawful.

If the Prosecutor intends to rely on evidence acquired through an illegal search to prove his/her case, your attorney can apply for this evidence to be expunged from the court record. As a result, the Prosecutor will have insufficient evidence, and you will be acquitted. 

6.       Incorrect Calculation of the ‘Laundered’ Amount

Remember, the fines imposed as punishment for money laundering differ depending on the 'laundered' amount. If the ‘laundered’ amount is little, you will pay a small amount of money as a fine.

Suppose the law enforcement agencies incorrectly calculate the 'laundered' amount. In that case, you may end up paying a higher fine than what you would have paid if the 'laundered' amount was correctly calculated. Moreover, a higher 'laundered' amount is an aggravating factor in your case, and it can make you receive a longer imprisonment term.

However, if you intend to use this defense, you’d have to admit to the money laundering charges. Then, you would demonstrate to the court that the ‘laundered’ amount was incorrectly calculated. This way, you will get a more lenient sentence.

7.       The Act Described is not Money Laundering

As illustrated above, the criminal offense of money laundering covers a wide array of activities. Sometimes, Prosecutors find it hard to distinguish between money laundering and other criminal offenses.

Arizona Criminal Code 13-2317 lists the activities that are deemed to be money laundering. If the facts of your case do not fall within the scope of these activities, then the act described is not money laundering.

If you are in this situation, your attorney can enter into a plea bargain agreement with the Prosecution. This way, you will be charged with a less serious offense and be sentenced to less severe penalties.

8.       The Property was not derived from an Unlawful Activity

Remember, one of the elements that the Prosecutor must prove for you to be convicted of money laundering is that the 'laundered' amount was obtained from unlawful activity. You cannot be convicted of money laundering if you adduce evidence showing that you legitimately earned the money. For instance, you can show the court your business or payment receipts.

This defense is most suitable when the Prosecution lacks sufficient evidence showing that you were involved in unlawful activity. If you can clearly demonstrate that you legitimately earned the 'laundered' amount, you would be acquitted.

Money Laundering and Related Offenses

There are several offenses that are related to money laundering. Typically, money laundering is not charged as a stand-alone crime. These related offenses are usually charged alongside it. Some of these offenses include:

  • Trafficking
  • Corruption
  • Cybercrime

Here is a brief discussion of each of them:

1.       Trafficking

There are various forms of trafficking, such as drug trafficking, alcohol smuggling, and human trafficking. All these crimes are related to money laundering.

Usually, a lot of money is obtained from these trafficking activities. Individuals who get involved in these activities usually attempt to 'clean' the money and end up being caught in the process. As a result, they get charged with both money laundering and trafficking.

2.       Cybercrime

A person can engage in identity theft and electronic fraud. The proceeds obtained from such activities can also be ‘laundered’ through online methods, such as participating in online gambling or investing in cryptocurrency. If you are caught in the process of ‘laundering’ money obtained from cybercrime, you will face charges for both money laundering and cybercrime. 

3.       Corruption

Often, corruption results in money laundering. Individuals who engage in corrupt activities usually try to 'clean' the money to make it appear legitimately earned.

Just like in trafficking and cybercrime, such individuals may be arrested while 'cleaning' the money. As a result, they will face criminal charges for both corruption and money laundering.

Find a Criminal Defense Attorney Near Me

We at the Phoenix Criminal Attorney understand the predicament you or your loved one might be in after being arrested for money laundering. This is why we are here to help you.

Financial crimes are complex, and they require a high level of expertise. Our team of lawyers is well equipped and committed to helping you fight your money laundering charges. Call us today at 602-551-8092 for a free consultation.

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