Blogs from July, 2018

person in handcuffs holding money

Recently, Rabobank’s California subsidiary pleaded guilty to money laundering and agreed to forfeit $369 million. According to an Associated Press news report, this happened after a lengthy investigation, which essentially determined that this unit was used to launder millions of dollars in drug money from Mexico. The bank’s subsidiary also pleaded guilty to one count of conspiracy to defraud the United States.

This was reportedly one of the most substantial settlements in the United States involving money laundering involving Mexican drug cartels. Rabobank is based in Utrecht, Netherlands. U.S. officials began their investigation in 2013 when they started looking into whether the subsidiary broke federal banking laws and regulations.

Understanding Money Laundering

The definition of money laundering is essentially the act of cleaning up dirty money or money obtained from criminal illegal activity. To clean it up, the money is channeled into bank accounts and other lawful uses so the source of the money becomes untraceable. In California, there are two specific laws that relate to money laundering. California Penal Code Section 186.10 covers money that is related to any type of criminal activity. California Health & Safety Code deals with money that is specifically earned from drug crimes.

It is important to understand that both of these could be charged as a misdemeanor or a felony. What prosecutors end up charging you with, will typically depend on your criminal history and the circumstances of your case. If you are convicted of a misdemeanor, penalties may include up to one year in a country jail or a fine of up to $1,000. However, felonies are much more serious charges. A felony money laundering convicted could result in up to four years in state prison and up to $250,000 in fines.

Cryptocurrency & Money Laundering: How Does It Work?

Much like driverless cars, cryptocurrencies, also known as virtual or digital currencies, are said to be the way of the future. Cryptocurrency, the most popular of which is Bitcoin, is a medium of exchange. Instead of paper currency, it uses cryptography to secure and verify transactions. Cryptography is also used to create new units of this type of currency as well. Basically, cryptocurrencies are limited database entries that no one can modify until very specific conditions are fulfilled. In addition to Bitcoin, there are many others now such as Dash, Peercoin, Ether, Ripple, and Litecoin.

Cryptocurrencies do offer some benefits. Since they are digital, they cannot be counterfeited like paper money. There are no fees with cryptocurrency as there might be with a credit card or bank transaction. In addition, cryptocurrencies offer protection from identity theft, unlike credit cards where you give someone access to your full credit line even if the transaction might only be for a smaller amount. With cryptocurrency, you can send precisely the amount you want to a merchant or recipient without providing them with all of your credit information.

Cryptocurrency Money Laundering Charges in California

It remains to be seen how the use of cryptocurrencies like Bitcoin evolves in the coming years and whether they are misused by tax evaders and those involved in organized crime. Under California Penal Code 186.10 PC, in order to convict a person of money laundering, prosecutors must prove that he or she made a transaction through a bank such as making a deposit, withdrawing funds, initiating a wire transfer, writing a check, or exchanging money into a foreign currency.

It is important to note that you cannot be convicted of money laundering under this law for any type of transaction that does not involve a financial institution. Probably the most important element in prosecuting money laundering is that the transaction should be made with the specific intent of promoting criminal transactions or cleaning up dirty money that came from criminal activity such as a drug deal.

Defenses in Money Laundering Cases

Money laundering charges must be proved by the prosecution who has the burden of proof in criminal cases. If you are charged with a money laundering offense you may have several legal defenses. Your attorney might argue that you lacked the criminal intent or even the knowledge that you were laundering money that was obtained from criminal or illicit activity. The charges will have to be thrown out if the amount of money did not meet the minimum threshold for a money laundering conviction. Your charges could also be dismissed if you were the victim of police misconduct or if the investigation was improperly conducted.

Money laundering is a state as well as a federal crime. If you are convicted on federal money laundering charges, you could face up to 20 years in federal prison or face up to $500,000 in fines. If you are convicted or engaging in a transaction that is higher than $10,000 in value utilizing funds obtained from criminal activity, you could be looking at up to 10 years in federal prison and a fine. If you are facing money laundering charges in California, please contact our white-collar crime defense lawyers to find out how we can help fight the charges and clear your reputation.