Specified Unlawful Activity

Many crimes qualify as “Specified Unlawful Activities” under federal law. This term connotes offenses which can support money-laundering crimes. Money laundering is an offense that criminalizes transactions that are designed to promote certain crimes, hide those crimes, or spend proceeds from those crimes in large quantities. See 18 USC 1956 and 1957.

For example, if a fraudster deposits wire fraud proceeds into an account named under a shell corporation, and then uses those deposits to buy a home in the corporation’s name, the federal Government may argue that both the deposit and the purchase were done in a manner to conceal or disguise the source of the funds and thus constituted money laundering. Or, if a drug dealer mixes drug proceeds with the cash earnings of a laundromat for deposit in a bank, that deposit would be done in a manner to conceal the true source of funds and thus money laundering.

The operative question then becomes, which offenses can be used as a basis to assert that money derived from them, if involved in a transaction, is involved in a money laundering transaction?

The answer is…Specified Unlawful Activity.

What is Specified Unlawful Activity?

These crimes are listed under 18 USC 1956(c)(7) and 1961(1). Some of them are smuggling (18 USC 545, 549, 554), unlawful firearms importation (18 USC 922), FDIC fraud, wire fraud (18 USC 1343), mail fraud (18 USC 1341), sports bribery, counterfeiting, narcotics offenses (21 USC 841), welfare fraud, human trafficking passport fraud, and a multitude of other federal offenses.

Make no mistake; this list is expansive because it is the tool used by the U.S. Government to shut down the financial incentive for crime. In essence, money-laundering statutes make criminal proceeds toxic and risky in commerce. As such, money-laundering offenses are afforded an even more expansive forfeiture theory than allowed for most other crimes.

Typically, only facilitating property and traceable proceeds are subject to forfeiture. However, property that is commingled, or merely “involved in” a money laundering offense can be seized and forfeited. This means that the legitimate earnings of the laundromat can be taken and kept by the Government along with the laundered drug money. This legal paradigm has become a powerful tool in the arsenal of federal law enforcement.

Obviously, this expansion invites abuse and raises concerns that innocent businesses and citizens are vulnerable to possible overreaching and overinclusion. If you are under investigation for any Specified Unlawful Activity, contact Varghese Summersett PLLC at 817-203-2220 or online:

Start typing and press Enter to search

3 Shares
Tweet
Share3
Share
Email
Reddit
Stumble