Money Laundering (18 U.S.C. §§ 1956–1957)
Two statutes targeting financial transactions involving proceeds of specified unlawful activity (SUA).
§ 1956 — Laundering of Monetary Instruments
Three prohibited transaction types:
§ 1956(a)(1) — Domestic Transactions
Knowing that proceeds are from SUA, conducting or attempting to conduct a financial transaction:
- (A) With intent to promote the carrying on of SUA, OR
- (B) With intent to engage in tax evasion or fraud, OR
- (C) Knowing the transaction is designed to conceal or disguise the nature, source, ownership, or control of proceeds, OR
- (D) Knowing the transaction is designed to avoid a transaction reporting requirement
§ 1956(a)(2) — International Transactions
Transporting, transmitting, or transferring funds with intent to promote SUA or to conceal the proceeds.
§ 1956(a)(3) — Sting Operations
Conducting a financial transaction represented to be proceeds of SUA (covers undercover operations).
§ 1957 — Engaging in Monetary Transactions in Property Derived from SUA
Simpler statute: knowingly engaging or attempting to engage in a monetary transaction in criminally derived property worth more than $10,000.
Unlike § 1956, § 1957 does not require intent to conceal or promote — merely knowingly transacting in SUA proceeds over $10,000.
Exception: transactions necessary to preserve attorney’s fees (some circuits).
”Specified Unlawful Activity” (SUA)
§ 1956(c)(7) cross-references § 1961(1) (RICO predicates) plus many additional offenses. Includes drug trafficking, fraud, bribery, RICO violations, terrorism, and many others.
Merger Problem
United States v. Santos (2008): “proceeds” in § 1956 means profits, not gross receipts — conducting a financial transaction with the bare revenues of an unlawful enterprise (to pay operating expenses) does not constitute money laundering. Congress later narrowed Santos for some SUA categories.