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Houston White Collar Crimes Lawyer: Charged with Money Laundering?


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It is important to hire a skilled Money Laundering lawyer to defend you who has knowledge of all the possible defenses to assert in your case. While related charges can further complicate a money laundering defense or other type of case, it is important to remember that just because you have been accused, doesn’t mean you are guilty. Contact Houston White Collar Crimes Lawyer Charles Johnson immediately for your free phone consultation. Attorney Johnson will take your call 24/7 365 days/year at (713) 222-7577 to discuss your case. Put his knowledge to work for you.

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Houston White Collar Crimes Lawyer: Charged with Money Laundering?

  1. 1. Facing a Money Laundering Investigation? Hire the Leading Houston White Collar Crimes LawyerThe Federal crime of Money Laundering istraditionally understood to be the practice offiltering “dirty” money, or ill-gotten gains,through a series of transactions until the fundsare “clean,” or appear to be proceeds from legalactivities. The United States Criminal Codetakes a broader stance towards moneylaundering, and criminalizes knowingly engagingin a broad array of financial transactions thatinvolve money either derived from or meant topromote various illegal activities, or that involvecertain elements of deception.While money laundering charges are oftenperceived as related with drug crimes, they aremore frequently related with business-relatedcrimes. For example, money laundering chargesmay be associated with illegal funds obtainedthrough business fraud, mortgage fraud/realestate fraud schemes or other white collarcrimes.The Charles Johnson Law Firm represents individuals and institutions in matters such as:  Hiding money  Failing to file require cash transaction reports  Making multiple cash withdrawals or deposits slightly below the $10,000 reporting threshold  Evading taxes by underreporting income  Alleged Patriot Act violations  Illegal wire transfers  Financial transactions involving proceeds of unlawful activity  Other illegal transactions  Federal criminal appeals involving money launderingSuch activities are often viewed by federal prosecutors as indicators of money laundering. Houston MoneyLaundering Lawyer Charles Johnson will provide a vigorous defense of clients who have drawn scrutiny fromthe federal government for their financial transactions. If the government is able to make the case that yourfinancial transactions were an effort to “launder” money received from criminal activities such as drugtrafficking or weapons trafficking, you will face forfeiture of your assets. Houston Lawyer Charles Johnsonis available to speak with you directly about your case, anytime night or day, at (713) 222-7577 ifyou have been charged with or are being investigated for Money Laundering. 1
  2. 2. Overview of Money Laundering in TexasAlthough money laundering can be a complex process, it usually involves three distinct steps that can occursimultaneously or sequentially. These steps are referred to as (1) Placement, (2) Layering, and (3)Integration.  Placement is the initial process of getting illegal funds into “the system,” or placing unlawful proceeds into legitimate financial institutions. A common technique used for placement is structuring, or “smurfing,” which involves dividing the funds into multiple deposits of cash that are below reporting thresholds and then depositing the funds at one or more institutions, using one or more individuals to make the deposits. Placement may also be accomplished by purchasing money orders or travelers checks at one institution and depositing them into accounts at other institutions.  Layering is the process of converting funds after they have entered the legitimate system. This step involves a series of complex financial transactions that move the funds in order to distance them from their illegal source. For example, dirty money may be converted to clean money through the purchase and sale of stocks, bonds, art, or jewelry. It may also be wired as payment for non-existent goods, disbursement to a non-existent borrower, or simply a transfer to another account.  Integration is the process in which the illegal funds re-enter the legitimate economy and become virtually indistinguishable from legal funds. The newly cleaned funds, often commingled with legitimate funds, are then ready for use, be it in investing in real estate, purchasing luxury items, or financing business ventures.Common elements that drive the efforts of money launderers throughout this three step process include “theneed to conceal the origin and true ownership of the proceeds, the need to maintain control of theproceeds, and the need to change the form of the proceeds in order to shrink the huge volumes ofcash generated by the initial criminal activity.”It is important, when reviewing literature on money laundering, to be aware that a conviction for the crime ofmoney laundering may not necessarily reflect activity that would traditionally be understood to constitutemoney laundering. For example, someone who buys legitimate goods online commits money laundering,under the federal statute, if the supplier is outside of the country and the supplies are intended to facilitateone of several crimes — even if the product is itself legal and is being used in a legal way. (For example,purchasing napkins in such a way would be money laundering, if they were to be used by an illegal casino.)Off-shore AccountsIdentifying and verifying money laundering is a difficult task, partly because of the complexities of the multi-transactional process but also because of the legal, political, and economic barriers that interfere with andoften completely prevent investigation or enforcement of U.S. law outside of U.S. borders. Some of thesebarriers are reduced through the use of “memoranda of understanding” (MOUs), or mutual agreements —between agencies or officials of different nations — to exchange information and cooperate in criminalinvestigations. However, not all nations enter into these or other cooperative agreements. Examples of theseinstances include Nauru, Myanmar, and Nigeria. 2
  3. 3. Costs and StatisticsThere is no clear picture of the actual amount of money laundered globally. Estimates based on reportedcrimes will tend to underestimate the figure, and estimates based on the size of the underground economywill tend to overestimate the actual amount. Synthesizing a variety of sources, the International MonetaryFund cites figure of between ¾ of a percent to 2 percent of the world’s gross domestic product, when usingthe reported crime method and 5 to 85 percent of a nation’s economy (depending on the nation) when usingthe underground economy method. These two figures can be found in other sources, roughly combined togive a range of 2-5 percent of the world’s GDP. In 1996, the 2-5 percent formula yielded between 590 billionand 1.5 trillion dollars. This figure is relatively often quoted as being the range of the magnitude of themoney laundering problem (sometimes “rounded up” to 600 billion)- such as by the FBI. The U.S.Department of the Treasury has also been quoted as estimating that “$600 billion represents a conservativeestimate of the amount of money laundered each year.” Using 2005’s world GDP of 59.6 trillion, the 2-5%approach would give one a figure of between 1.2 and 3 trillion dollars. Of course, the research that providedthe main support for the 2-5% figure is itself a decade old, and money laundering has become an issuecommanding much greater legislative, regulative, and law enforcement attention in the wake of September11th.In fiscal year 2001, federal law enforcement agencies in the U.S. seized more than $300 million in criminalassets that were attributable to money laundering.In 2001, U.S. district courts completed 1,420 money laundering cases and convicted 1,243 individuals, ormore than 87 percent of the defendants prosecuted. Some of these cases involved more than $100 million inlaundered funds, and one-fifth of the cases involved more than $1 million. Of the Money Laundering ControlAct charges made in 2001, 63 percent involved fraud, bank embezzlement, transporting stolen property, andcounterfeiting, and 16 percent involved drug trafficking. Almost half (44 percent) of the money launderingcases referred to U.S. Attorneys in 2001 occurred in the six geographic areas designated by the U.S.Departments of Justice and the Treasury as areas of high risk for financial crimes and money launderingactivity (High Intensity Financial Crime Areas or HIFCAs). These areas are (with the year designated a HIFCA)  New York and Northern New Jersey – (2000)  Los Angeles – (2000)  San Juan, Puerto Rico – (2000)  The southwest Texas and Arizona/Mexico border – (2000)  The northern district of Illinois (Chicago) – (2001)  The northern district of California (San Francisco) – (2001)  Southern Florida (Miami) – (2003)High Profile Examples/Case StudiesIn 2006, Charles E. Edwards was sentenced to 13 years in prison and was ordered to pay $320,397,837 inrestitution following his September conviction on charges of wire fraud, money laundering, and conspiracy tocommit money laundering. The evidence showed that from 1996 through September 2000, Edwards, thefounder of ETS Payphones, Inc. (ETS), raised capital to grow his coin-operated payphone business by using anetwork of independent insurance agents to sell payphones to investors throughout the United States for$5,000 to $7,000 per phone. Edwards convinced investors to buy payphones and lease them back to ETS forwhat Edwards claimed would be a guaranteed profit of approximately 14 percent per year. The scheme 3
  4. 4. defrauded approximately 12,000 nationwide investors out of more than $400 million. Edwards siphoned offapproximately $21 million of the fraud proceeds for himself and his wife. In addition, the evidence showedthat Edwards engaged in a series of unusual and convoluted financial transactions, which served no legitimatebusiness purpose and were intended solely to conceal and disguise the source, location, ownership, nature,and control of the proceeds involved in those transactions.In 2006, Edmundo P. Rubi was sentenced to 70months in prison for conspiracy to commit mail fraud and money laundering. Rubi previously pled guilty tothe charge that he conspired to conduct a scheme to defraud investors out of more than $12 million using hiscompanies, Knights Express, Ltd. and Djmler Enterprises, Inc. Rubi was also ordered to pay restitution in theamount of $12,483,000. According to the plea agreement, beginning in 1999 and continuing up to October31, 2001, Rubi formed and operated Knights Express Ltd. and Djmler Enterprises, Inc. for the purpose ofsoliciting investments from members of the public. In connection with his guilty plea, Rubi admitted that hemade fraudulent representations that investor funds would be used to purchase and resell Federal Reservenotes in an international trading program. In actuality, no such international trading programexisted. Millions of dollars of investor funds were used instead to pay the periodic returns that investorsreceived and to make unsecured investments. Rubi also intentionally concealed from investors the fact thatmillions of dollars of investor funds were converted for his own personal use and benefit.The DrugEnforcement Agency (DEA) and U.S. Attorney’s Office in New York completed in 2002 a “long-terminvestigation targeting the money laundering and narcotics activities of the Khalil Kharfan Organizationoperating in Colombia, Puerto Rico, Florida, and the New York Tri-State area.” Initial statements by theagencies indicated that more than $100 million in narcotics proceeds were laundered in the scheme. Theorganization used members to open fictitious businesses, which they used for the deposit and transfer ofmoney between countries. Approximately $1 million has been recovered.In 2002, a California jury convictedtwo principals in a Costa Rican tax evasion-money laundering ring. Wayne Anderson, 62, and Richard Marks,58, were arrested in one of the largest undercover stings in IRS history. The two men were charged withconspiracy to launder $470,000, mostly through offshore trusts that concealed millions of dollars for U.S.taxpayers who wanted to evade U.S. taxes. The case resulted in seven federal convictions.“A Nashville, Tennessee man was sentenced to 20 years in jail for his three-year role in a large-scale cocainedistribution and money laundering organization in the Nashville area. The individual pled guilty to conspiracyto commit money laundering and conspiracy to distribute cocaine. The defendant used several vehicles withsophisticated hidden compartments to transport the cocaine and the proceeds to pay for it back and forthbetween Chicago and Nashville.”“On June 21, 2002 a federal jury in North Carolina convicted Mohamad Hammoud and his brother Chawki,Lebanese immigrants, for providing material support to the terrorist group Hezbollah through racketeering,conspiracy, and conspiracy to commit money laundering by funneling profits from a cigarette smugglingoperation. In March 2002, several of the Hammoud’s co-defendants pled guilty in North Carolina federal courtto racketeering, conspiracy, and conspiracy to commit money laundering for funneling profits from theircigarette smuggling operation to purchase military equipment for the Hezbollah terrorists. The case beganwhen the West Virginia State Police seized a significant quantity of contraband cigarettes. The Federalindictment alleged that millions of dollars worth of cigarettes were smuggled out of North Carolina to resell inStates, including Michigan, where higher State taxes greatly increase the sales price.” 4
  5. 5. The Response/Current EffortsLegislation and RegulationThe U. S. has imposed a number of legislative and regulatory standards to deter money laundering. The mostsignificant of these are the following:  The Bank Secrecy Act (BSA), signed into law in October 1970, implemented a reporting system for large financial transactions (over $10,000) to monitor and deter the flow of criminally obtained proceeds. (Codified 31 U.S.C. §§ 5311-5330)  The Money Laundering Control Act of 1986 amended the BSA and specifically made money laundering – spending, saving, transporting, or transmitting proceeds of criminal activity – a federal felony. (Codified 18 U.S.C. §§ 1956 and 1957)  The Anti-Drug Abuse Act of 1988 increased the penalties and sanctions for money laundering crimes and amended the money laundering provisions of 18 U.S.C. § 1956 to include financial transactions with the intent to violate § 7201 (attempted tax evasion) or § 7206 (false tax return) of the Internal Revenue Code of 1986 (26 U.S.C.). (Pub. L. 100-690)  The Racketeer Influenced and Corrupt Organizations (RICO) Act identified violations of money laundering statues as “predicate offenses” that constitute racketeering activity and provided for both civil and criminal actions against violators. (Codified 18 U.S.C. §§ 1961-1968)  The Money Laundering and Financial Crimes Strategy Act of 1998 required that the Secretary of the Treasury coordinate and implement a national strategy to address money laundering. (Pub. L. 105- 310)  The USA PATRIOT Act of 2001 established new rules and responsibilities affecting financial institutions and commercial businesses to prevent, detect, and prosecute terrorism and international money laundering. For example, the Act required banks to actively monitor customer transactions, expanded the ability of public and private institutions to share information, and increased civil and criminal penalties for money laundering. (Pub. L. 107-56)Current Efforts To Reduce Money LaunderingIn 2005, the Drug Enforcement Agency (DEA) completed Operation Mallorca, an investigation into the use ofthe Columbian Black Market Peso Exchange to launder drug money. Operation Mallorca resulted in the arrestof 36 individuals and the seizure of 7.2 million dollars, 947 kilograms of cocaine, 7 kilograms of heroin, and21,650 pounds of marijuana.In 2005, the multinational Organized Crime Drug Enforcement Task Force completed Operation Cyber Chase,an investigation that targeted illegal Internet pharmacies. These pharmacies used more than 200 websites tosell controlled substances internationally and to launder the proceeds. Just one of the organizations involvedused this system of web-based distribution to move approximately 2.5 million dosage units of Schedule II-Vpharmaceuticals (including Vicodin, amphetamines, and anabolic steroids) permonth.“Operation Wire Cutter,” a two and a half year joint effort of U.S. and Colombian law enforcement, uncovereda massive money laundering operation for several Colombian narcotics cartels that channeled money throughNew York, Miami, Chicago, Los Angeles, San Juan, and Puerto Rico using the Black Market Peso Exchange. Theefforts resulted in 37 arrests – 29 in the U.S. and eight in Colombia – as well as the seizure of more than $8million, 400 kilos of cocaine, 100 kilos of marijuana, 6.5 kilos of heroin, nine firearms, and six vehicles. 5
  6. 6. Since the attacks of September 11, 2001, efforts to reduce money laundering – throughout the world – haveincreased significantly, with particular attention paid to associations with terrorist activities. EffectiveSeptember 24, 2001, for example, President Bush issued Executive Order 13224, “blocking property andprohibiting transactions with persons who commit, threaten to commit, or support terrorism.” Initially, 27individuals and organizations were identified as Specially Designated Global Terrorist (SDGT) entities underExecutive Order 13224. By June 6, 2003, 282 individuals and organizations had been identified as SDGTs, andover $137 million in associated assets had been frozen worldwide.In July 2002, the second National Money Laundering Strategy issued by the U.S. Department of the Treasurypointedly addressed the issue of money laundering as “integral to the war on terrorism.” Specifically, thestrategy (1) presented “government’s first plan to attack financing networks of terrorist entities” and (2)focused on “the use of charities and other non-governmental organizations to raise, collect, and distributefunds to terrorist groups.”Penalties for Money Laundering Charges in TexasMoney laundering refers to the process of concealing financial transactions. Various launderingtechniques can be employed by individuals, groups, officials and corporations. The goal of a money launderingoperation is usually to hide either the source or the destination of money in connection with a criminal act.Money laundering is a white collar crime that will be investigated by many different sources including: local,state and federal investigators that may also include the Department of Justice, the State Department, theFederal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) and the Drug Enforcement Agency(DEA).A person can be charged with money laundering if suspected of receiving, concealing, possessing,transferring, transporting or having any interest in the proceeds of criminal activity. In fact a moneylaundering charge can be filed against a person that has almost anything at all to do with the proceeds of acriminal act. In Texas, money laundering charges have varied penalties depending on the amounts involved: 1. Value from $3000 to $19,999 = third degree felony (2-10 years in prison plus a hefty fine if convicted) 2. Value from $20,000 to $99,999 = second degree felony (2-20 years in prison plus a hefty fine if convicted) 3. Value from $100,000 and up = first degree felony (5 to life years in prison plus a hefty fine if convicted)There are several different types of money laundering charges you can face. Some are more serious thanothers and could result in severe punishments and steep fines. In fact, if you are convicted of moneylaundering, you could be forced to pay a fine up to twice the amount of the total dollar amount of fundsinvolved in the illegal activity.It is important that you contact Houston White Collar Crimes Lawyer Charles Johnson as soon as youare aware of charges against you or a loved one. If you are confronted with federal charges, you will want anexperienced attorney who is familiar with federal court procedure as it is quite different from the state courtprocess. Attorney Charles Johnson is well-versed in both federal and state law and courtprocedure. No matter what your money laundering charges or other white collar crime charges entail, youcan trust that he will prepare a solid defense on your behalf. 6
  7. 7. Defenses for Money Laundering Charges in Texas  Absence of intent to commit a crime — Most crimes require intent to commit the crime. In terms of money laundering, people who are accountants, bankers, or others who deal with large amounts of money are often charged with money laundering without even knowing they committed a crime. If you can prove you were unaware the money obtained was illegal, then there is no way you can have intent to commit money laundering.  Duress — Duress occurs when a person truly believes there will be some danger or harm if they do not participate in the crime. In money laundering, criminals often force accountants or bankers to launder illegally obtained money or else be subjected to harm. If this is the case, you will have a good duress defense (as the banker or accountant).  Insufficient evidence — A criminal charge can be dismissed if there is insufficient evidence to prosecute. In money laundering, an intention to prevent illegally obtained funds from being traced to its origin is required for a conviction. A conviction also requires proving the money laundered came from a specific illegal activity. If one of these two things is missing, then there is a possibility this defense will work.The main defense to Money Laundering is the defendant’s lack of knowledge that the funds were from anunlawful activity. Attorney Charles Johnson may be able to establish that you did not intend to promoteunlawful activity or that the transaction was not designed to conceal the unlawful activity. This is usually avalid defense when a person is merely an employee of a business, or a non-involved partner who is basically“duped” into managing a business whose proceeds are the result of an illegal activity. This defense can besupported with evidence from the company’s financial statements or accounting records showing materialmisrepresentation or omissions, committed by someone else other than the defendant. Many times onedevious business partner will ask another partner to “sign off” on certain loan documents or tax returnswithout telling the defendant that the information contained therein is false misleading. Just because adefendant has signed off on paperwork that might be designed to cover up the source of money or funds doesnot mean the defendant actually knew about the source of the funds. It is important to interview all of theparties involved to ascertain the defendant’s good character and honesty and lack of control over this area ofthe company’s finances, and to emphasize the partner’s bad character. Another defense is tracing the fundsinvolved in the transactions and proving that these specific funds did not fund, nor were the proceeds of, anyunlawful activity. The defenses for Money Laundering are quite complex (as are all white collar cases) andinvolve many hours of records research by attorneys and expert witnesses. It is often beneficial to utilize a“forensic accountant” to also go through the documents in order to defend against the Government’sallegations. Additionally, because the Charles Johnson Law Firm fights conviction from all angles, they will assert a wide range of defenses and challenges to constitutional violations that apply in all criminal cases. The possibilities are numerous and diverse. One of those is the “denial of right to Counsel”. This occurs when a suspect is in custody and requests to speak to their attorney, but is denied and questioning continues. Other defenses may include challenging the validity of any search warrant, or whether there were any “forensic flaws” during the investigation of your case. 7
  8. 8. Depending on what else you have been charged with, this could include exposing flawed procedures regardingfingerprints analysis; computer analysis/cloning hard drive procedures; GPS tracking monitors; forensicfinancial accounting reviews; etc.. Lastly, one of the most common defense tactics isexposing sloppy ormisleading police reports which include everything from misstatements, false statements, flawed photoline-ups and inaccurate crime scene reconstruction. It is important to hire a skilled Money Laundering lawyerto defend you who has knowledge of all the possible defenses to assert in your case.While related charges can further complicate a money laundering defense or other type of case, it is importantto remember that just because you have been accused, doesn’t mean you are guilty. Contact HoustonWhite Collar Crimes Lawyer Charles Johnson immediately for your free phone consultation. Attorney Johnsonwill take your call 24/7 365 days/year at (713) 222-7577 to discuss your case. Put his knowledge to workfor you.Hire the Best Houston Money Laundering Lawyer: Houston White CollarCrimes Lawyer Charles JohnsonAt the Charles Johnson Law Firm, our attorneys possess the necessary skills and knowledge to successfullydefend individuals facing federal money laundering charges. Unless you retain counsel who will aggressivelyinvestigate the matter on your behalf, you may have a poor chance of avoiding a lengthy prison term amongother severe consequences.Money laundering is a serious offense with potential long-term consequences including jailtime. When your future is at stake, contact the Leading Houston Criminal Lawyer at the Charles Johnson LawFirm. You can reach Attorney Johnson directly anytime night or day at (713) 222-7577,Posts Related to Facing a Money Laundering Investigation? Hire the LeadingHouston White Collar Crimes Lawyer  Houston Criminal Defense Lawyer » Arrested for a Drug Manufacturing Crime? Here are Methods to Beat It. Virtually all drug charge convictions bear severe consequences, but the state of Texas makes every effort to crack down on drug manufacture cases. From meth ...  The Consequences of An Allegation of Embezzlement: Hire the Right Houston White Collar Crimes Attorney Embezzlement or Misappropriation of Funds Can Be a Serious Crime in Texas Federal Courts. Embezzlement is considered a white collar crime in the state of ...  Houston Criminal Lawyer: Facing An Arrest For Drug Trafficking? Drug trafficking is generally referred to as the manufacturing, transporting and distributing of large quantities of drugs. It often involves more than one person. Drug ...  Houston Lawyer » Cant Locate Employment Due To A Criminal History? 8
  9. 9. In the event you have been found guilty of a criminal offense, you might wonder if you will be able to find job opportunities. Employers ...  Houston Lawyer » Arrested for Cocaine Distribution? Felony charges for drug distribution or possession are the most typical felonies in criminal law. If you have been arrested for possession or distribution of ...Original article may be found at:Facing a Money Laundering Investigation? Hire the Leading Houston White Collar Crimes LawyerHouston Lawyer Charles Johnson can be reached 24 hours a day, 7 days a week.Call us at 713-222-7577 or toll free at 877-308-0100.Major Credit Cards Accepted.Houston Lawyer Charles JohnsonSolving Problems...Every Day®http://www.houstonlawyer.com815 Walker Street #1047Houston, TX 77002E-Mail: charlesjohnson@houstonlawyer.comPhone: (713) 222-7577Toll-Free: (877) 308-0100Map to Office 9