Attorney Allain Marain

Money Laundering

Money Laundering: An Introduction

Money Laundering “Money laundering” is a crime under both federal and New Jersey law. These offenses are defined in laundry lists of “thou shalt nots”. The federal thou shalt nots can be found at 18 U.S.C. § 1956. The New Jersey thou shalt nots are at N.J.S. 2C:21-23, -24, -25, -26, and -27. All of these sets of laws are written in convoluted legalese that, if written by a high school student, would cause any English teacher to assign a failing grade. We describe both the federal and New Jersey laws on this page. The two links above are to the text of the laws.

Federal Money Laundering Law

For the most part, federal money laundering consists of financial transactions involving property obtained from unlawful activity. Although the property involved is typically money, any kind of property can be the focus of a federal money laundering case. Thus federal money laundering investigations can involve real estate, automobiles, airplanes, electronics, drugs--you name it.

To obtain a conviction, the Assistant United States Attorney must prove that the accused individual knew that the property was proceeds of unlawful activity. Additional elements exist. The classic additional element is contained in 18 U.S.C. § 1956(a)(1)(B)(i). That provision requires knowledge that the transaction is designed “to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.”

Upon conviction under Sections (a)(1) or (a)(2) of 18 U.S.C. § 1956, a person may be fined the greater of $500,000.00, or double the value of the property involved in the transaction. The permissible fine upon conviction of Section (a)(3) of the federal money laundering statute is “only” $250,000.00. (Reference 18 U.S.C. § 3571(b)(3)). Under either of the three sections, he may also be sentenced to a term in federal prison of up to twenty years.

Section (a)(3) of the federal money laundering statute is rather interesting. A conviction under this section does not involve property obtained from unlawful activity. Required, instead, is that a law enforcement official, or someone acting at the official's direction, merely indicate that the property was obtained in that manner. Participation by a government agent is thus needed for the activity in question to be a crime in the first place! For that reason, Section (a)(3) prosecutions, more than others, may lend themselves to entrapment defenses.

Under the United States Constitution, all federal laws must have a constitutional basis in order to be valid. The federal money laundering statute does not, in so many words, set forth its constitutional basis. Constitutional challenges thus far, however, have failed. Courts have sustained its constitutionality by finding that interstate commerce, or taxation, elements, satisfied jurisdictional requirements. Future federal money laundering prosecutions will likely reach the same result. Jurisdiction is nonetheless an issue that must be considered in all federal money laundering prosecutions.

New Jersey Money Laundering Law

New Jersey money laundering law, for the most part, captures the same kinds of events covered by federal money laundering law. The New Jersey money laundering statutes, however, attempt to be much more comprehensive. Without sacrificing generalty, the New Jersey money laundering statutes, by specific examples, encompass various situations not spelled out in the federal money laundering statutes. Additionally, of course, the New Jersey money laundering statutes need not depend, either explicitly or implicitly, upon federal constitutional law-making authority.

Depending on the circumstances, the court may imprison a person convicted of New Jersey money laundering for up to twenty years, and impose a fine of up to $500,000.00.

Money Laundering Lawyers in New Jersey

Activities that violate federal money laundering statutes may (and typically will) also violate New Jersey money laundering statutes, and vice versa. Such activities would thus lend themselves to prosecution by both New Jersey and federal authorities. Constitutional provisions against double jeopardy do not preclude separate prosecutions by each jurisdiction.

Allan Marain and Norman Epting, Jr. are federal and New Jersey money laundering lawyers. Their combined experience is approximately seventy years. They are available to discuss your federal and New Jersey money laundering charges in a confidential no-cost no-obligation one-on-one conference. They would welcome your call.

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