Money Laundering · Federal Charges
What Is Concealment Money Laundering?
The concealment branch requires proof that a transaction involving unlawful proceeds was designed, at least in part, to hide or disguise a listed attribute.
Eligible to Practice in Texas
Attorney at Law
Bar Card Number: 00796807
TX License Date: 11/01/1996
214 Connally St Ste A
Sulphur Spgs, TX 75482-2612
The bank records may show transfer after transfer. That tells counsel where the money went, but not necessarily why anyone chose that route. For a domestic concealment charge under 18 U.S.C. § 1956(a)(1)(B)(i), complexity is not enough. The financial transaction must actually involve proceeds of specified unlawful activity. The defendant must know the property represents proceeds of some felony activity and must also know of the transaction’s concealment design. At least part of that design must be to hide or disguise the proceeds’ nature, location, source, ownership, or control.
Focus on the transaction’s design
An affiliate account, an escrow arrangement, a treasury transfer or confidentiality may have a legitimate explanation. An investigator may instead point to false invoices, nominee account holders, layered transfers, changed descriptions or undisclosed beneficial ownership. Which explanation fits requires a look at the transaction in context. Privacy and movement of funds alone do not establish either a concealment design or the defendant’s knowledge of it.
What, specifically, was the transaction meant to hide? The government may allege that it obscured an account’s owner or the person controlling it. A false description may be alleged to hide the money’s source or nature. For each allegation, the evidence must connect the defendant to the design. Making information harder to find is an effect; it does not necessarily explain what anyone intended. The required knowledge and the involvement of proceeds from specified unlawful activity still have to be proved, along with the other charged elements.
Separate purpose from effect
Cuellar v. United States concerned cash hidden inside a car on its way to Mexico. The question was why the money was going there. The Supreme Court held that the efforts to hide it during the trip did not establish the concealment purpose required by § 1956(a)(2)(B)(i).
Cuellar helps distinguish the reason for moving money from the effect of hiding it along the way. The case concerned international transportation under § 1956(a)(2)(B)(i). In a domestic case, counsel must examine the elements of § 1956(a)(1)(B)(i) and apply the provision charged in the indictment.
A lawful reason and a concealment design can coexist. The statute’s phrase “in whole or in part” allows more than one purpose, so a business, tax, or privacy reason does not resolve the allegation.
Treat “shell company” and “layering” as descriptions that need supporting proof. For an entity, find out which services it actually provided. To test the competing explanations, compare the ownership disclosures and account-opening materials with payment instructions, communications, and other records made at the time.
Three separate questions about concealment
Trace the actual route, account access and descriptions.
Identify any plan to conceal nature, location, source, ownership or control.
Connect the person to knowledge of criminal proceeds and the concealment design.
Trace the people, instructions, and records
The timeline begins when the underlying property was obtained. From there, the records should show who chose the route, who opened or controlled each account, who selected the transfer description and who handled the funds. Earlier business practice provides a point of comparison. Any recorded change in the route needs to be considered as well.
An employee’s name on a transfer record may identify the person who processed it. It may not identify the person who chose the route. Ask who gave the instruction and locate it if it was in writing. Then ask about the alternatives discussed, the ownership information disclosed and whether the business used the same accounts before the suspected fraud. For a disputed invoice or description, identify its author rather than assuming that the person who entered the payment also wrote it.
The account holder and the person giving instructions may be different people. Keep a separate record of each identity and the documents supporting it. Use the alleged offense date to identify which version of the statute applies, then compare it with the indictment. A holding company or a collection of accounts may be entirely lawful. The fact that either exists is not enough to prove this charge.
Sources
- 18 U.S.C. § 1956(a)(1)(B)(i) and (a)(2)(B)(i).
- Cuellar v. United States, 553 U.S. 550 (2008) (international-transportation provision).
This article provides general information, not legal advice. A specific case requires review of the charging instrument, offense dates, and underlying records. Representation begins only after the firm agrees to take the matter.
