Money Laundering · Federal Charges
When Can an LLC or Nominee Support Concealment Proof?
Who directed the payment? What did the invoice describe? Follow the records behind an LLC, trust, or nominee arrangement.
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Suppose a bank statement shows $18,000 going to an LLC. The LLC’s name is familiar: a relative formed it years ago. Before calling that payment concealment, there is a lot to find out. What was bought? Who asked for the transfer? What did the sender know about the money? This hypothetical is a useful place to begin because the company name answers none of those questions.
The owner on paper may not have sent the payment
You can look up a formation date. Finding the person who directed a particular payment takes more work. Ask for the bank instruction and its approval. Check who could sign and who could log in on that date. Put those records beside the operating agreement, beneficial-owner information, and tax filings. If the names differ, find out why. Check the bank’s customer-identification file and the contracts too.
If the record names a nominee, ask who the nominee was holding title or an interest for. I’d want the agreement and any directions given under it. I’d ask similar questions about a trust. Before drawing a conclusion about knowledge, I’d need to see how the arrangement worked for this payment. What one participant knew cannot just be assigned to all the owners.
There is also the company’s history to consider. Had it been doing ordinary business for years, with invoices and records to show for it? Had it been dormant until this transfer? An investigator should ask both questions. A legitimate history doesn’t explain every later payment, and a period of inactivity doesn’t prove a crime.
Compare a documented equipment purchase through a disclosed LLC with a false consulting invoice paid to a dormant related company. Check the order, delivery, accounting entry, invoice author and approval, claimed services, messages, and next destination. Request the original invoice and work product; ask who did the work and when. Note missing evidence.
Under Section 1956(a)(1)(B)(i), the government has more to prove than use of a company. The financial transaction must involve proceeds of specified unlawful activity. The person must know the property represents proceeds of some form of unlawful activity. The person must also know the transaction is designed, at least partly, to conceal or disguise the proceeds’ nature, location, source, ownership, or control. Which of those was supposedly hidden, and how? That is a question about this payment, not about LLCs in general.
Not every laundering allegation requires concealment
Section 1957 is different. It addresses knowingly engaging, or attempting to engage, in a qualifying monetary transaction involving more than $10,000 in criminally derived property from specified unlawful activity. The government need not prove the same concealment purpose or knowledge of which specified unlawful activity produced the property. The other requirements still have to be met. An $18,000 transaction is above the threshold; that fact alone doesn’t establish the offense.
For each payment, list source, date, amount, recipient, purpose, supporting or conflicting documents, and unresolved questions.
I’d keep the ordinary business payments distinct from the disputed one. Someone may know about an account without knowing its funds came from crime. Even the person controlling it does not automatically have criminal intent. With related companies, I’d follow the receipts, payments, and instructions for each one. I would not assume a common owner made every company part of one scheme.
Sources
This article provides general information, not legal advice. The law and its application depend on the facts and the law in effect on the relevant date. Consult a lawyer about a specific matter.
Money Laundering Defense · Texas and Federal Financial Crimes Defense
