Understanding Money Laundering: A Dual Crime Under California and Federal Law

December 20, 2023

Money laundering, a crime that masks the illegal origins of money, is rigorously prosecuted both under California law and federal statutes. In California, it’s governed by Penal Code 186.10, while at the federal level, it falls under 18 U.S.C. 1956. This article delves into the intricacies of money laundering laws, highlighting how this offense is tackled at both state and federal tiers.

Money Laundering Under California Law: Penal Code Section 186.10


California’s Penal Code section 186.10 addresses money laundering within the state’s jurisdiction. Under this statute:

  • Definition: Money laundering is defined as conducting or attempting to conduct transactions (including, but not limited to, bank transactions) with the intent to promote criminal activity, or knowing that the proceeds involved are from criminal activity.
  • Criminal Activity: It pertains to transactions involving proceeds from any criminal activity, not just drug-related offenses.
  • Penalties: The penalties for money laundering in California can be severe, often depending on the amount of money involved. They can range from fines to imprisonment.

Federal Money Laundering Statutes: 18 USC 1956


On the federal front, 18 USC 1956 delineates the crime of money laundering with a broader scope. Federal law typically comes into play in cases involving interstate or international activities. Key aspects include:

  • Transactions Involving Proceeds of Crime: It’s a federal offense to engage in a financial transaction with proceeds known to be from criminal activity, with the intent to promote the carrying on of specified unlawful activity or to conceal or disguise the nature, location, source, ownership, or control of the proceeds.
  • International Component: Federal law also addresses transactions that cross international borders.
  • Stiffer Penalties: Federal penalties for money laundering are often more severe than state penalties and can include lengthy prison terms and substantial fines.

The Overlap of State and Federal Jurisdictions


Money laundering cases can be complex due to the potential overlap of state and federal laws. In some instances, an act of money laundering may violate both state and federal laws, and the offender can be prosecuted under both jurisdictions. This duality allows prosecutors to apply the law that best fits the specifics of the case, including the scale of the operation and the amount of money involved.

Investigative Challenges and Legal Nuances


Investigating and proving money laundering requires unraveling complex financial transactions to establish the source of funds. Both state and federal authorities often collaborate, utilizing various resources, including forensic accounting, to track and identify laundered money.

Legal defenses in money laundering cases can be equally intricate. They may involve challenging the evidence of the intent to launder money or disputing the assertion that the accused knew the money was from an illegal source.

Conclusion


Understanding money laundering laws under both California Penal Code section 186.10 and federal statute 18 USC 1956 is crucial for legal professionals, financial institutions, and businesses. These laws represent significant tools in the fight against organized crime, drug trafficking, and other serious offenses, emphasizing the importance of the legal system in disrupting and deterring complex financial crimes. As financial systems continue to evolve, especially with the advent of digital currencies and online transactions, the legal landscape of money laundering is likely to become even more complex, requiring continuous adaptations in legal strategies and enforcement mechanisms.

If you have been arrested, charged, or are under investigation for a state or federal crime, then contact the Law Offices of John D. Rogers to speak with an experienced Orange County criminal defense attorney.

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