Money Laundering · Federal Charges

What Are the Elements of Federal Money Laundering Under Section 1956?

A guide to the charged subsection, transaction records, and the knowledge or intent prosecutors must establish.

By Heath Hyde · East Texas and statewide

Mr. Heath Enix ‘Heath’ Hyde
Eligible to Practice in Texas
Attorney at Law
Bar Card Number: 00796807
TX License Date: 11/01/1996

Primary Practice Location: Sulphur Springs, TX and Dallas, TX
214 Connally St Ste A
Sulphur Spgs, TX 75482-2612

For a domestic § 1956(a)(1) count, the government must prove a qualifying financial transaction involving actual proceeds of specified unlawful activity and knowledge that the property represents proceeds of some unlawful activity. It must also prove the charged branch: intent to promote specified unlawful activity; intent to engage in tax conduct prohibited by § 7201 or § 7206; or knowledge that the transaction was designed, at least in part, to conceal or disguise the proceeds or avoid a state or federal transaction-reporting requirement.

The indictment must identify the transaction and statutory branch. Promotion, concealment and reporting avoidance are not interchangeable descriptions of a suspicious wire. For international § 1956(a)(2), examine the distinct cross-border transfer and mental-state requirements; for § 1956(a)(3), represented proceeds can matter in an undercover setting. For conspiracy under § 1956(h), a separate agreement and knowing participation are at issue. Defense counsel should resist a broad jury instruction suggesting that complex finances suffice for every branch.

Build an element chart from the records

For each charged transaction, list the alleged predicate offense, when proceeds arose, the source account, the defendant’s knowledge, the statutory purpose or branch, the jurisdictional facts, and the supporting exhibit. Compare the government’s flow chart with the bank statements themselves. Official statute.

Why the statutory branch matters

The branch matters to both jury charge and evidence. A concealment count should identify what attribute was designed to be hidden; a promotion count should identify the ongoing unlawful activity; a reporting count should identify the requirement allegedly evaded. A prosecutor may present a single transfer as evidence supporting several alternative theories, but instructions and unanimity questions require research. Create a bank-record-backed chart for each charged transaction and refuse to substitute the overall appearance of a complex network for proof of its particular mental-state component.