Money Laundering – California Penal Code 186.10 and 18 U.S. Code § 1956
Money laundering is a white-collar crime that is often charged alongside other criminal charges when the government suspects a person is involved in illegal activity and is trying to cover up the illegal origin of money. This crime is defined differently under state and federal law, but it can result in serious penalties under either charge. Read on to learn more about the nature of these charges and possible penalties.
California Money Laundering
Under state law, money laundering may be charged under the general statute or under the Health and Safety Code when drugs are involved.
General Money Laundering
The general statute for money laundering in California illegalizes conducting or attempting to conduct a bank transaction where the value of the transaction or series of transactions is greater than $5,000 in a one-week period or more than $25,000 in a one-month period with the intent to promote criminal activity or knowing that the money was derived from criminal activity.1
Because the offense requires specific intent or knowing conduct, you cannot be found guilty of this crime if you did not know that the money had illegal origins or did not intend for it to be used to promote criminal activity.
Money Laundering with Drugs: Health and Safety Code 11370.9
California Health and Safety Code 11370.9 addresses a more specific crime of money laundering when controlled substances are involved. This offense involving receiving, acquiring, or engaging in a transaction that involves money or property valued at more than $25,000 in a one-month period when you knew it came from a controlled substances crime and you committed the offense because you were trying to conceal the source, ownership or control of the money or property.2
Both types of money laundering offenses in California can be charged either as a felony or a misdemeanor, depending on the circumstances of the case and the defendant’s criminal history. If the crime is charged as a misdemeanor, the maximum penalty is up to one year in a county jail and court fines. If it is charged as a felony, the defendant can be sentenced to 16 months, two years, three years, and a fine up to $250,000 or twice the amount of money that was laundered or more if the defendant was previously convicted of a similar offense3
Federal Money Laundering
Money laundering can also be charged as a federal offense.
The elements of a federal money laundering offense include:
- The defendant conducted or attempted to conduct a financial transaction
- The defendant knew the source of the funds or property involved in the financial transaction had illegal origins
- The property was derived from an illegal source
- The defendant acted with one of the four specific intents described by the statute4
The maximum penalty for this offense is a term of imprisonment of 20 years and a $500,000 fine or twice the amount involved in the transaction, whichever is greater.
1 California Penal Code 186.10(a) – “Any person who conducts or attempts to conduct a transaction or more than one transaction within a seven-day period involving a monetary instrument or instruments of a total value exceeding five thousand dollars ($5,000), or a total value exceeding twenty-five thousand dollars ($25,000) within a 30-day period, through one or more financial institutions (1) with the specific intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on of any criminal activity, or (2) knowing that the monetary instrument represents the proceeds of, or is derived directly or indirectly from the proceeds of, criminal activity, is guilty of the crime of money laundering.”
2 California Health and Safety Code 11370.9 – “Any person convicted of violating Section 11350, 11351, 11351.5, 11352, 11353, 11355, 11357, 11359, 11360, 11361, 11363, 11366, or 11368, or of committing any offense referred to in those sections, shall not, in any case, be granted probation by the trial court or have the execution of the sentence imposed upon him or her suspended by the court, if he or she has been previously convicted of any offense described in subdivision (c). (b) Any person who was 18 years of age or over at the time of the commission of the offense and is convicted for the first time of selling, furnishing, administering, or giving a controlled substance which is (1) specified in subdivision (b), (c), (e), or paragraph (1) of subdivision (f) of Section 11054, specified in paragraph (14), (15), or (20) of subdivision (d) of Section 11054, or specified in subdivision (b) or (c) of Section 11055, or (2) which is a narcotic drug classified in Schedule III, IV, or V, to a minor or inducing a minor to use such a controlled substance in violation of law shall not, in any case, be granted probation by the trial court or have the execution of the sentence imposed upon him or her suspended by the court.”
3 California Penal Code 186.10 – “A violation of this section shall be punished by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170, by a fine of not more than two hundred fifty thousand dollars ($250,000) or twice the value of the property transacted, whichever is greater, or by both that imprisonment and fine. However, for a second or subsequent conviction for a violation of this section, the maximum fine that may be imposed is five hundred thousand dollars ($500,000) or five times the value of the property transacted, whichever is greater.”
4 18 U.S. Code § 1956 – “Whoever Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity—(A) (i)with the intent to promote the carrying on of specified unlawful activity; or (ii)with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or (B)knowing that the transaction is designed in whole or in part—(i)to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii)to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both. For purposes of this paragraph, a financial transaction shall be considered to be one involving the proceeds of specified unlawful activity if it is part of a set of parallel or dependent transactions, any one of which involves the proceeds of specified unlawful activity, and all of which are part of a single plan or arrangement.
(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States—
(A) with the intent to promote the carrying on of specified unlawful activity; or
(B) knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part—
(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater, or imprisonment for not more than twenty years, or both. For the purpose of the offense described in subparagraph (B), the defendant’s knowledge may be established by proof that a law enforcement officer represented the matter specified in subparagraph (B) as true, and the defendant’s subsequent statements or actions indicate that the defendant believed such representations to be true.
(3) Whoever, with the intent—
(A) to promote the carrying on of specified unlawful activity;
(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or
(C) to avoid a transaction reporting requirement under State or Federal law, conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate the specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.” Is guilty of the crime of money laundering.