High Conviction Rate in Money Laundering Cases
Jim Kouri, CPP
September 24, 2005
About 18,500 defendants faced federal money laundering charges in US courts during the years 1994 through 2001, the Justice Department's Bureau of Justice Statistics reported in a statement to the National Association of Chiefs of Police. Approximately 10,600 of these defendants had a money laundering charge as the most serious offense, and of these almost 9,170 (86 percent) were convicted.
According to a report submitted to the 14,000-member police commanders organization,in 2001, the last year for which the data are available, federal district courts disposed of 1,420 money laundering cases, convicting 1,243 defendants (87.5 percent). Of those convicted, 91 percent pleaded guilty and 9 percent were found guilty following a trial. The money laundering amounts ranged from $2,000 or less to more than $100 million with about 20 percent of cases involving more than $1 million.
Money laundering involves the conversion of illicit assets and their use to promote additional crimes (Money Laundering Control Act offenses) as well as offenses in which the financial institutions circumvent their reporting requirements, that is, Bank Secrecy Act violations.
The Money Laundering Control Act offenses comprised the bulk (84 percent) of the defendants charged with money laundering as the most serious offense in 2001. Financial institution violations made up the remaining 16 percent. Sixty-three percent of the Money Laundering Control Act charges involved fraud, bank embezzlement, transporting stolen property and counterfeiting. Sixteen percent were associated with drug trafficking. Seven percent involved witness tampering, customs violations and violent crimes.
The National Money Laundering Strategy is co-directed by the US Departments of Treasury and Justice. The effort coordinates law enforcement responses against money laundering organizations and systems and provides overall coordination among federal, state and local law enforcement jurisdictions.
Various law enforcement agencies referred 121,818 criminal matters to US Attorneys during 2001, of which 1,437 were money laundering matters. Money laundering cases can be complex and may involve multiple law enforcement agencies such as the Federal Bureau of Investigation, Drug Enforcement Administration, the US Customs and the Internal Revenue Service. The FBI and the IRS (28 percent of all matters referred) reported the most cases to US Attorneys during 2001.
The federal judicial districts with the most referrals included the Southern District of Florida in Miami (106 cases), the Southern District of New York in Manhattan (83), District of Puerto Rico (78), the Eastern District of New York in Brooklyn (71), the Southern District of Texas in Houston (64) and the Middle District of Florida in Tampa (55). Almost half (44 percent) of all federal money laundering matters were referred in the six geographic areas designated by the US Departments of Treasury and Justice as areas of high risk for financial crimes/money laundering activity (High Intensity Financial Crime Areas or HIFCA's).
The majority of the defendants charged with money laundering during 2001 were individuals. Less than 2 percent were commercial firms. The 22 commercial defendants charged included auto dealerships, grocery stores, banks, furniture stores, construction firms and beauty shops. Individual defendants convicted in 2001 were mostly male (80 percent), citizens of the US (77 percent), over 35 years old (70 percent) and white (52 percent). One in three money laundering defendants had a prior adult conviction.
Money laundering offenders may face penalties of prison terms of up to 20 years, fines of up to $500,000 or twice the value of the property involved and possible criminal and civil forfeiture of the value of the property or funds involved in the transaction. Among defendants convicted in 2001, nearly 3 out of 4 received a prison term with an average sentence of slightly more than 4 years. Twenty-one percent of defendants convicted received a fine — the median fine was $2,750.
Sources: US Department of Justice, National Association of Chiefs of Police
According to a report submitted to the 14,000-member police commanders organization,in 2001, the last year for which the data are available, federal district courts disposed of 1,420 money laundering cases, convicting 1,243 defendants (87.5 percent). Of those convicted, 91 percent pleaded guilty and 9 percent were found guilty following a trial. The money laundering amounts ranged from $2,000 or less to more than $100 million with about 20 percent of cases involving more than $1 million.
Money laundering involves the conversion of illicit assets and their use to promote additional crimes (Money Laundering Control Act offenses) as well as offenses in which the financial institutions circumvent their reporting requirements, that is, Bank Secrecy Act violations.
The Money Laundering Control Act offenses comprised the bulk (84 percent) of the defendants charged with money laundering as the most serious offense in 2001. Financial institution violations made up the remaining 16 percent. Sixty-three percent of the Money Laundering Control Act charges involved fraud, bank embezzlement, transporting stolen property and counterfeiting. Sixteen percent were associated with drug trafficking. Seven percent involved witness tampering, customs violations and violent crimes.
The National Money Laundering Strategy is co-directed by the US Departments of Treasury and Justice. The effort coordinates law enforcement responses against money laundering organizations and systems and provides overall coordination among federal, state and local law enforcement jurisdictions.
Various law enforcement agencies referred 121,818 criminal matters to US Attorneys during 2001, of which 1,437 were money laundering matters. Money laundering cases can be complex and may involve multiple law enforcement agencies such as the Federal Bureau of Investigation, Drug Enforcement Administration, the US Customs and the Internal Revenue Service. The FBI and the IRS (28 percent of all matters referred) reported the most cases to US Attorneys during 2001.
The federal judicial districts with the most referrals included the Southern District of Florida in Miami (106 cases), the Southern District of New York in Manhattan (83), District of Puerto Rico (78), the Eastern District of New York in Brooklyn (71), the Southern District of Texas in Houston (64) and the Middle District of Florida in Tampa (55). Almost half (44 percent) of all federal money laundering matters were referred in the six geographic areas designated by the US Departments of Treasury and Justice as areas of high risk for financial crimes/money laundering activity (High Intensity Financial Crime Areas or HIFCA's).
The majority of the defendants charged with money laundering during 2001 were individuals. Less than 2 percent were commercial firms. The 22 commercial defendants charged included auto dealerships, grocery stores, banks, furniture stores, construction firms and beauty shops. Individual defendants convicted in 2001 were mostly male (80 percent), citizens of the US (77 percent), over 35 years old (70 percent) and white (52 percent). One in three money laundering defendants had a prior adult conviction.
Money laundering offenders may face penalties of prison terms of up to 20 years, fines of up to $500,000 or twice the value of the property involved and possible criminal and civil forfeiture of the value of the property or funds involved in the transaction. Among defendants convicted in 2001, nearly 3 out of 4 received a prison term with an average sentence of slightly more than 4 years. Twenty-one percent of defendants convicted received a fine — the median fine was $2,750.
Sources: US Department of Justice, National Association of Chiefs of Police
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