Lawmakers in New Jersey have clearly recognized how individuals engaged in organized crime benefit financially from illegal activities such as drug trafficking. These unlawfully earned profits are often converted into “legitimate” funds through the process of money laundering. The State has recently implemented strict criminal and civil sanctions and penalties that may be imposed on those who participate in these activities.
Money Laundering (2C:21-25)
The crime involves possession, transportation, or participation in transactions involving property that is “known or which a reasonable person would believe to be” obtained through unlawful activity. These actions may include those that “facilitate or promote” unlawful activity. These crimes are generally committed in efforts to hide or mask property obtained through illegal means. The crime commonly involves acts that evade laws requiring transactions to be properly reported.
Individuals who engage in money laundering are aware that the property was obtained through some form of illegal activity. It is not required to prove that the offender was directly involved in the illegal activity or that they are aware of the specific details of the crimes. Prosecutors often must prove that an individual intended to “avoid a transaction reporting requirement” when currency transactions are made at financial institutions over several days.
Financial institutions are required to report currency transactions that exceed a certain value. Those engaged in the crime often divide the currency into smaller amounts and then conduct several separate financial transactions to avoid this reporting requirement. The crime may be proven in the following ways:
- The offender was engaged in a scheme with an entity such as a casino, check-cashing business, or other business that is capable of transmitting money who unlawfully fails to report a required currency transaction
- The offender was engaged in a scheme with an entity such as a casino, check-cashing business, or other business that is capable of transmitting money who files a currency transaction report that contains omissions or false information
- Proving that the offender structured currency transactions at one or more financial institutions to avoid the required reporting of the transactions
Federal Laws
The federal provisions regarding money laundering were enacted in 1986. The federal law differs slightly from the New Jersey statute. They expand the offense to specifically include financial activity that is intended to falsify or evade paying taxes. Often these offenses are charged as wire fraud according to 18 U.S.C. §1343. The federal laws do not supersede state laws.
Degrees of Money Laundering Offenses
|
Level of the Offense |
Amount Involved |
|
First Degree |
$500,000 or more |
|
Second Degree |
Between $75,000 and $500,000 |
|
Third Degree |
Less than $75,000 |
A judge or jury is tasked with determining the amount involved in the commission of the offense. The total amount may be a sum of multiple currency transactions that are associated with a single scheme.
For first-degree offenses, a prison term may be imposed of 10 to 20 years and a fine of up to $200,000. For second-degree offenses, a prison term may be imposed of five to ten years and a fine of up to $150,000. For third-degree offenses, a prison term may be imposed of up to five years and a fine of up to $15,000. Based on the nature of this offense, the law allows the courts to enhance fines according to the special provisions in (2C:27.1) outlined below.
Those who are convicted of a first-degree offense may face a mandatory minimum prison sentence. The court may require that the offender serves between one-third and one-half of the sentence before having any eligibility for parole. A conviction for money laundering is not merged with other offenses and any sentences may run consecutively.
Anti-Money Laundering Profiteering Penalty (2C:21-27.1)
In addition to the fines that may be imposed based on the statutes, the prosecutor may impose additional fines. For first-degree offenses, a fine of up to $500,000 may be imposed. For second-degree offenses, a fine of up to $250,000 may be imposed. For third-degree offenses, a fine of up to $75,000 may be imposed. The prosecution must justify these enhanced monetary penalties by satisfying a burden of proof of “by the preponderance of the evidence.” To support the appropriateness of imposing the additional penalties the prosecution may include expert witness testimony.
The court may allow an anti-money laundering profiteering penalty to be paid in installments. The payments are to be structured in a manner that allows for payment in the “shortest period of time consistent with the nature and extent of his assets and ability to pay.” The court may consider other assets that an offender has including property which may be used to pay the penalty. Property liquidations may not occur if the court determines that it would create “undue hardship” for innocent people.
The profiteering penalty may be imposed in addition to fines and other orders of restitution. This penalty is not intended to be imposed instead of forfeiture actions. Property and other assets that are subject to forfeiture are not deemed as credit toward the payment of the profiteering penalty.
Investigative Interrogatives for Evidence (2C:21-29)
The Attorney General may require any person to “answer and produce material for examination” for purposes of an investigation. This process is executed using an investigative interrogatory. This may occur when the Attorney General finds that there is a reason to suspect that a party has evidence that will aid in a money-laundering investigation.
Enforcement in New Jersey
The Financial and Cyber Crimes Bureau is responsible for leading the New Jersey Anti-Money Laundering Task Force. These efforts are conducted statewide in conjunction with liaisons from agencies of law enforcement and a variety of institutions and organizations within the financial sector. Roughly 80% of the cases the Bureau investigates involve crimes that $75,000.
Experienced Legal Representation for Allegations of Financial Crime
Are you being indicted for allegedly participating in criminal activity such as money laundering, theft, or fraud? Attorney Joseph D. Lento has been defending clients accused of wrongdoing in the New Jersey courts for many years. Contact the office today at (888) 535-3686 for a case consultation.
