Congress enacted money laundering laws in order to criminalize the way in which some individuals and businesses attempt to purify or "clean" proceeds from unlawful activities. The law of money laundering attacks the financial transactions of illegally obtained proceeds and not the illegal activity which produced the proceeds. The two actions are separate and generally give rise to different charges.

A person commits money laundering when he performs a financial transaction with knowledge that the property involved came from a particular illegal act. Money laundering also involves an intention to advance the continuation of the illegal act. It should be noted that a person need not actually succeed in making the transaction to be convicted. An attempted transaction is enough.

Additionally, a financial transaction is illegal when the person knows the property came from a particular unlawful act and knows the transaction was calculated to hide the character of the illegally acquired property. Federal law also makes it illegal to take part in these activities when a person transports or transfers such property from within the country to somewhere outside the country or vice versa. Those convicted of these crimes face up to 20 years in prison and a fine up to $500,000, or twice the value of funds involved.

Federal law also makes it illegal for a person to conduct a financial transaction with property obtained from a particular illegal act with the intent to advance the continuation of the illegal act. A person who engages in such a transaction with the intention of hiding the character, place, or possession of the property may be guilty of money laundering. A conviction will result in a possible prison sentence of 20 years and a fine of up to $500,000, or twice the value of the funds involved.

The term "transaction" simply refers to a transfer that includes selling, buying, or loaning. If a financial institution is involved, the term refers to transfers such as withdrawing, depositing, taking out loans, and generally any other transfer a bank may conduct. The monetary instrument that is used can be currency, and virtually any type of check or security.

Money laundering requires some underlying particular illegal act from which the funds were derived. Included among these acts are crimes involving controlled substances, homicide, arson, certain violent crimes, certain types of fraud, bribery of public officials, trafficking in persons, sexual exploitation of children, any act which constitutes a criminal enterprise, various environmental crimes, and a whole host of other crimes.

The intent to hide where the property came from may be inferred by evidence produced at trial. However, the evidence of concealment must be substantial. It is not enough to convict simply by showing the spending of illegally acquired funds. Inferences may be drawn from such activities as using a third party to conceal the real owner, structuring the transaction in a way to avoid attention, exchanging small bills for larger ones, and the creation of sham businesses.

There is an additional statute related to money laundering which makes it illegal for a person to knowingly engage in a financial transaction with property which was derived from a particular illegal act worth more than $10,000. Generally, the government does not have to show that the defendant was aware the property came from a particular illegal act. A conviction under this statute may result in a sentence of up to 10 years and a fine.

A criminal defense attorney has many options in defending allegations of money laundering. First, the government must prove every element of the crime as charged. For instance, the first element of money laundering generally requires the government to show that the money is tainted (the proceeds of a crime). If the government has no evidence showing that the money is tainted, there can generally be no conviction.

The information provided above is a very general summary of the law regarding this particular legal issue at the time this text was prepared. Because this analysis is subject to change depending upon recent cases and developments, you should not rely on this summary as legal advice. As with any important legal question, you should always consult with a lawyer licensed to practice in your jurisdiction. Our lawyers are licensed to practice in all Georgia state and federal courts.