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 Money Laundering Part 2: Sentencing 

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Michael Santos

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WHAT YOU NEED TO KNOW ABOUT MONEY LAUNDERING PART 2: SENTENCING FACTORS

Money laundering, the process of making criminal proceeds appear clean or legitimate, carries penalties of up to 20 years in prison.

INTRODUCTION

Money laundering — the process of making criminal proceeds appear legitimate — continues to increase unabated. As reported online, every year, an estimated amount in the range of US$800 billion-US$2 trillion (2-5% of global GDP) gets laundered globally. 

Federal law enforcement is devoting significant resources to curb the use of modern technology to launder money. There is a particular concern among law enforcement and regulators about the rising use of cryptocurrency platforms to commit money laundering. 

Part 1, available now on the Prison Professors blog, covers: 

  • the basics of money laundering 
  • the federal statutes that prohibit money laundering, 
  • classic and current money laundering methods, and 
  • a recent Department of Justice case on PPP loan fraud and money laundering. 

Money laundering is a serious criminal offense that carries hefty fines and penalties, as well as prison time. 

Part 2 focuses on the federal criminal penalties for money laundering, as well as the sentencing factors that may apply to people convicted for money laundering.

DISCUSSION

There is no mandatory minimum prison sentence for people convicted of money laundering. That said, the available range of criminal penalties can be quite severe.

Sentencing judges will consider various factors to determine a person’s penalties for money laundering under federal law.  

Some relevant factors include a person’s level of knowledge, their level of involvement in the crime, and the amount of money involved.

*Pro-Tip: Remember to consult legal counsel for legal advice regarding any criminal investigation or court case, including money laundering. Prison Professors, an Earning Freedom company, works alongside legal counsel to help clients achieve better outcomes. 

At the direction of Congress, the United States Sentencing Commission takes a very harsh view of money laundering, in part due to its association with other financial crimes, drug crimes, and terrorism activities.

Relevant Statistics

Statistics published by the United States Sentencing Commission (USSC) concerning the punishment courts actually doled out for money laundering in 2017 are sobering. 

For example, in 2017:

  • The majority of money laundering offenders were sentenced to imprisonment only (84.7%).
  • The average sentence length for money laundering offenders was 67 months. 

A person convicted of money laundering faces up to 20 years of incarceration and fines of up to $500,000 or twice the value of the property involved in the transaction, whichever amount is higher.

Those involved with money laundering offenses can also face other related criminal charges—for example, 18 USC Section 1957 imposes a penalty of 10 years of incarceration for depositing or spending $10,000 or more of the proceeds from money laundering activity under USC Section 1956.

The USSC 2017 statistics shed significant light on the weight sentencing judges afford to various factors. 

The underlying crime leading to the illegal funds carries significant weight: 

  • In almost 70% of cases, the Sentencing Guidelines Base Offense Level comes from the underlying offense that led to the laundered funds. 
  • Nearly two-thirds of the underlying offenses were Drug Trafficking (61.0%), followed by Theft, Property Destruction, and Fraud (31.0%), and all other offenses (8.0%).

The amount of money involved also carries a lot of weight:

  • In nearly one-third (31%) of cases, the Base Offense Level came from the total amount of laundered funds, and the median value of laundered funds was $200,000.

*Pro-Tip: Under the Sentencing Guidelines, each type of crime has a base offense level, which is the starting point for determining the seriousness of a particular offense. More severe types of crime have higher base offense levels (for example, a trespass has a base offense level of 4, while kidnapping has a base offense level of 32).

A person’s level of knowledge or involvement in the underlying criminal activity leading to the laundered funds also carries significant weight:

  • In 21% of money laundering cases, judges increased the sentence for people who knew the laundered funds were proceeds of a crime involving a controlled substance, violence, weapons, national security, or the sexual exploitation of a minor.
  • Judges increased the sentence for 7.5% of offenders for sophisticated laundering.
  • Judges increased the sentence for 21.7% of offenders for having a leadership or supervisory role.
  • Judges also increased the sentence for 4.2% of offenders for obstructing or impeding the administration of justice.

Conversely, in 10% of reported cases, judges decreased money laundering sentences for those with a minor or minimal role. 

To access the full USSC report Money Laundering Quick Facts (2017), click here: USSC Quick Facts Money Laundering FY 2017.

Additional Sentencing Factors

Other sentencing factors that a sentencing court may consider include: 

  • a person’s criminal history;
  • whether the person accepted a guilty plea (i.e., acceptance of responsibility) or was convicted after a trial;
  • whether the person’s involvement was limited to the money laundering offense or also included the underlying criminal activity;
  • any history of substance abuse or other related issues; and
  • any other relevant issues from their personal history.

CONCLUSION

Money laundering continues to increase unabated all around the world. Every year, over US $1 to $2 trillion is laundered globally. Federal law enforcement is devoting significant resources to curb the use of modern technology to launder money. There is a particular concern among law enforcement about the rising use of cryptocurrency platforms to commit money laundering. 

Money laundering is a serious criminal offense that carries hefty fines and penalties, as well as significant prison time.

As experts in sentencing mitigation, our team at Prison Professors regularly assists clients in crafting sentencing mitigation strategies in money laundering cases to obtain better outcomes. 

Our team works alongside legal counsel in white-collar criminal investigations and criminal prosecutions.

Prison Professors, an Earning Freedom company, works alongside (not in place of) civil and criminal defense counsel to help clients proactively navigate through investigations and prosecutions. Our team also helps clients prepare mitigation and compliance strategies.

If you have any questions or are uncertain about any of the issues discussed in this post, schedule a call with our risk mitigation team to receive additional guidance.

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