Introduction

Every year, it is estimated that somewhere between $800 billion and $2 trillion gets laundered globally. Money laundering is a serious crime in both Arizona and at the federal level where launderers illegally obtain money and then try to make their money seem legitimate through what are often complex financial schemes.

Money laundering got its name because one who commits money laundering “launders” money. In other words, they make “dirty” or illegal and then try to make their profits appear to be “clean.”

What is Money Laundering?

Money laundering involves any actions where one illegally obtains money, such as selling drugs or operating an illegal business, and then uses that money as to make it appear as legitimate. Broken down, there are usually three steps involved in money laundering.

1. Money is gained from an illegal action such as selling bootleg videos.
2. The money is moved through a financial scheme, like a shell corporation, to hide the criminal act.
3. The money is then returned to the launderer, appearing legitimate.

Money laundering can often present itself through tax evasion. For example, if you obtain money through a drug trafficking scheme (an illegal act), then seek to conceal that income by failing to report it on your tax returns (a financial scheme), the money is then kept with the launderer and appears as legitimate.

Another example of money laundering is through arms trafficking. A launderer will take illegally obtained weapons (an illegal act), trade the weapons for cash (a financial scheme), and keep the money that now appears “clean.”

Federal and Arizona State Crime

Money laundering is both a federal and a state crime. That means that both federal and state authorities can charge a person for an act of money laundering.

Money laundering is a federal crime under the Money Laundering Control Act of 1986. The act states that those commit money laundering may receive a fine up to $500,000 and/or a maximum of 20 years in prison.

Arizona also has its own rules regarding money laundering defined by A.R.S. 13-2317. The law is separated into three degrees, meaning a person can be guilty of money laundering in either the first, second, or third degree.

Degrees of Money Laundering and Penalties

The Arizona law on money laundering is both broad and specific as to what constitutes money laundering. While directly participating in the illegal act will be enough to constitute money laundering, lesser acts, such as facilitating the laundering through you or your business will also be enough to be charged under the Arizona law.

In Arizona, a person is guilty of money laundering in the second degree where any of the following occur and the prosecution can prove each element beyond a reasonable doubt:

• A person acquires or maintains an interest in, transacts, transfers, transports, receives or conceals the existence or nature of racketeering proceeds knowing or having reason to know that they are the proceeds of an offense.
• A person makes property available to another by transaction, transportation, or otherwise knowing that it is intended to be used to facilitate racketeering.
• Conducts a transaction knowing or having reason to know that the property involved is the proceeds of an offense and with the intent to conceal or disguise the nature, location, source, ownership, or control of the property or the intent to facilitate racketeering.
• Intentionally or knowingly makes a false statement, misrepresentation or false certification or makes a false entry or omits a material entry in any application, financial statement, account record, or other documents that is filed or required to be maintained or filed under Arizona law.
• Intentionally or knowingly evades or attempts to evade reporting requirements under the Code of Federal Regulations.
• Either attempts or intentionally or knowingly falsifies, conceals, covers up or misrepresents the identity of any person in connection with any transaction with a financial institution or money transmitter.

Second degree money laundering is considered a Class 3 felony that can lead to anywhere from 2.5 to 8.75 years in prison for first time offenders.

A person can be charged with first degree money laundering where they:

• Knowingly initiate, organize, plan, finance, direct, manage, supervise, or are in the business of money laundering or,
• Commit money laundering in the course of or for the purpose of facilitating terrorism or murder.

Money laundering in the first degree is a Class 2 felony, the most severe kind of felony in Arizona. Sentences can be from 4 years to 12.5 years for first time offenders.

Finally, a person is found guilty of money laundering in the third degree, the least severe money laundering offense, where:

• In the course of any transaction transmitting money, a person confers or agrees to confer anything of value on a money transmitter or any employee of a money transmitter that is intended to influence or reward any person for failing to comply with any requirement under title 6, chapter 12 (banking and disclosure requirements) or,
• A person engages in the business of receiving money for transmission or transmitting money, as an employee or otherwise, and receives anything of value upon an agreement or understanding that it is intended to influence or benefit the person for failing to comply with any requirement under title 6, chapter 12.

Money laundering in the third degree is a Class 6 felony which holds a minimum sentence of .5 years, and a maximum of 2 for first time offenders. Launders may also be subject to a fine of the greater amount of $2000 or three times the value of the money laundered.

Defenses to Money Laundering

Given the severity of the punishments associated with money laundering, it is important to evaluate all viable defenses to your money laundering claim. Defenses are asserted by you and your lawyer in court to give justification for why you should not be held criminally liable.

One possible defense is showing a lack of intent to commit the crime. For example, showing that while the act itself happened, you did not have the criminal mindset necessary while engaging in the illegal activity.

A person may also be able to claim the defense of duress. A duress defense is used to justify an illegal act because the person only committed the act because they were in fear of an immediate danger of death or serious bodily harm.

There may be other defenses that can be asserted depending on the specific facts of your money laundering case such as showing that an illegal search took place or there were acts of entrapment by law enforcement.

A lawyer will best be able to review the facts of your case and determine which defenses are most applicable and likely for success in your case.

Seek an Attorney for Representation

If you have been accused to money laundering, the penalties can be extremely serious ranging from large fines to multiple years in prison. Money laundering cases are often complex and fact specific.

Contacting an experienced criminal law attorney to represent you will be incredibly helpful in seeing your case through charge to trial.