MONEY LAUNDERING
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893
II. OVERVIEW OF THE STATUTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895
A. Section 1956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895
1. Transaction Money Laundering . . . . . . . . . . . . . . . . . . . 895
2. Transportation (or International) Money Laundering . . . . 896
3. Sting Money Laundering (“Sting Operations”). . . . . . . . . 897
B. Section 1957 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
III. ELEMENTS OF THE OFFENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
A. Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
B. Proceeds Derived from a Specified Unlawful Activity . . . . . . . 899
1. Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899
2. Specified Unlawful Activity . . . . . . . . . . . . . . . . . . . . . . 901
C. Financial Transaction Affecting Interstate or Foreign
Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901
1. Financial Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . 901
2. Interstate Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . 902
3. Multiple Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . 903
D. Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903
IV. DEFENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905
A. Constitutional Vagueness . . . . . . . . . . . . . . . . . . . . . . . . . . . 905
B. Double Jeopardy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905
C. Constitutionally Impermissible . . . . . . . . . . . . . . . . . . . . . . . 906
V. PENALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
A. Criminal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
B. Civil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 908
VI. INTRODUCTION TO THE BSA’S AML REGULATORY FRAMEWORK . . . . . . 909
A. Introduction to the BSA’s AML Regulatory Framework . . . . . 909
B. The AML Provisions in the FY 2021 NDAA . . . . . . . . . . . . . . 910
I. INTRODUCTION
The Treasury Department defines “money laundering” as “the process of mak-
ing illegally-gained proceeds (i.e., ‘dirty money’) appear legal (i.e., ‘clean’).”
1
1. U.S. DEP’T OF THE TREASURY, History of Anti-Money Laundering Laws, FIN. CRIMES ENF’T NETWORK,
https://www.fincen.gov/history-anti-money-laundering-laws (last visited Feb. 11, 2024).
893
Money laundering typically follows a three-step process: (i) placement—the laun-
derer places criminally derived money into a legitimate enterprise; (ii) layering—
the launderer places the money in various pretextual transactions to obscure the
original source; and (iii) integration—the launderer transforms the funds into non-
cash instruments recognized in the legitimate financial world, such as bank notes,
loans, or letters of credit.
2
Once the money is in these accepted forms, criminals
can effectively use the funds to finance illicit activities such as illegal narcotics
trafficking,
3
illegal weapons sales, human trafficking, fraud, political corruption,
child pornography, and terrorism.
4
Congress has passed several statutes to combat this problem. First, Congress
enacted the Bank Secrecy Act of 1970 (“BSA”), which forbids the export of more
than $10,000 of undeclared monies and requires financial institutions to have anti-
money laundering programs (“AMLs”) and file suspicious activity reports
(“SARs”).
5
Subsequent amendments to the BSA allow the Treasury Department to
enact additional governing rules.
6
The Money Laundering Control Act of 1986 (the “Act”) added teeth to the BSA
by criminalizing money laundering.
7
The Act’s expansive definition of “money
laundering” encompasses a broad spectrum of activities.
8
After the September 11
attacks, Congress expanded the Act through the International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 (“IMLAFA”), which broad-
ened existing rules and enforcement efforts.
9
Finally, in 2021, Congress passed a
wide-ranging suite of AML statutes, including the Anti-Money Laundering Act
(“AMLA”).
10
Section II of this Article provides an overview of the offenses covered under the
Money Laundering Control Act of 1986. Section III analyzes the elements of those
offenses. Section IV overviews the constitutional theories used to defend against
prosecutions under the Act. Section V discusses criminal and civil penalties under
the Act. Finally, Section VI introduces the various federal reporting requirements
2. See Teresa E. Adams, Tacking on Money Laundering Charges to White Collar Crimes: What Did Congress
Intend, and What Are the Courts Doing?, 17 GA. ST. U. L. REV. 531, 535–38 (2000) (describing the money
laundering process).
3. See generally GUY STESSENS, MONEY LAUNDERING: A NEW INTERNATIONAL LAW ENF’T MODEL (2000).
4. See generally PAUL ALLAN SCHOTT, REFERENCE GUIDE TO ANTI-MONEY LAUNDERING AND COMBATING
THE FINANCING OF TERRORISM (2d ed. 2006).
5. See 31 U.S.C. § 5316.
6. See 31 C.F.R. § 1010 (2019); see also Transfer and Reorganization of Bank Secrecy Act Regulations, 75
Fed. Reg. 65806 (Oct. 26, 2010); infra Section VI.
7. 18 U.S.C. §§ 1956–57.
8. See generally Jonathan H. Hecht, Airing the Dirty Laundry: The Application of the United States
Sentencing Guidelines to White Collar Money Laundering Offenses, 49 AM. U. L. REV. 289, 293–300 (1999)
(discussing the Act’s background); see also Andres Rueda, International Money Laundering Law Enforcement &
The USA PATRIOT Act of 2001, 10 MICH. ST. U. DET. COLL. L. J. INT’L L. 141, 151 (2001) (indicating that the
addition of “corrupt practices” to predicate offenses covered by §§ 1956–57 closed the loophole used by foreign
officials).
9. See USA PATRIOT Act, Pub. L. No. 107-56, § 302, 115 Stat. 272, 296–97 (2001) (expanding the list of
predicate offenses that give rise to a money laundering charge).
10. See William M. (MAC) Thornberry National Defense Authorization Act, Pub. L. No. 116-283, 134 Stat. 3388
(2021) (relevant AML provisions codified as amended in 18 U.S.C. § 1510 and scattered sections of 31 U.S.C.).
Section VI, infra, briefly addresses these updates.
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