HomeMy WebLinkAboutDocumentation_Regular_Tab 12_11/09/2006VILLAGE OF TEQUESTA
MEETING AGENDA ROUTING SHEET
MEETING DATE: October 11, 2006
REQUESTED ACTION/SUMMARY:
Approval of a Memorandum of Understanding that will allow the police
department to participate in the State Attorney Office of Palm Beach County Money
Laundering Task Force. This is a joint investigative task force managed by the Palm
Beach County State Attorney's Office.
RESOLUTION OR ORDINANCE NUMBER: Res # 13-06/07 Ord #
ORIGINATING DEPARTMENT: Tequesta Police Department
FUNDING SOURCE: 2006/2007 BUDGET
ACCOUNT NUMBER: N/A
CURRENT BUDGETED AMOUNT AVAILABLE: $ NIA
AMOUNT OF THIS ITEM: $ N/A
AMOUNT REMAINING AFTER THIS ITEM: $ N/A
BUDGET TRANSFER REQUIRED: ^Yes ®No
APPROPRIATE FUND BALANCE: ^Yes ^ No ®N/A
Piggyback Contract Name and #:
Or
Competitive Bid #
APPROVALS: ~`/,
DEPARTMENT HEAD: ~ i~~~°~w J~ 7Q
FINANCE DIRECTOR:
VILLAGE MANAGER: ~
VILLAGE MANAG~ RECOMMENDATION:
APPROVE ITEM:
DENY ITEM: ^
VILLAGE ATTORNEY: APPROVED FOR LEGAL SUFFICIENCY
®Yes ^No
^Not Applicable (n/a)
f
,',~EOUESrq , TEQUESTA POLICE DEPARTMENT ~
--
Ao~, ~ MEMORANDUM "7+1~'.
DEPT -,,~~~>
To: Michael Cou~o
Village Manager
From: Chief William E. McCollo
Date: October 13, 2006
Subject: MONEY LAUNDERING TASK FORCE -
MEMORANDUM OF UNDERSTANDING
Attached for your consideration is an agenda item for November 9, 2006; two
memorandums of understanding (MOUs) that will allow the police department to
participate in the Palm Beach County State Attorney Office Money Laundering Task
Force (METE) and the Internal Revenue Service -Criminal Investigations South
Florida High Intensity Financial Crimes Task Force (HIFCA).
Although there is no guarantee, this is a revenue sharing task force. Revenues are
shared based on the level of participation in a case and the forfeiture amounts
from the case. As a new member of the task force we would probably not see any
revenue for this budget year, but would be in a good position to benefit from any
financial forfeiture in the following fiscal year.
I have spoken with the Agent in Charge, Jim Acree, at the State Attorney's Office
and he would welcome an officer from our agency to the Task Force. It is my
intention to take advantage of this opportunity by assigning Detective Weinblatt to
the Task Force two (2) days per week. Mr. Acree has assured me that Detective
Weinblatt would be productive even though he is only being assigned two days per
week. This would also ensure that Detective Weinblatt was available for our
investigative needs.
The MOUs have been forwarded to Attorney Hawkins for his review and approval
for its legal form and sufficiency -see attached fetter to Mr. Hawkins.
1n addition, our participation in the task force assures the availability of
additional resources to protect our community from financial crimes.
As required, I have attached the necessary resolution and backup
information to be presented to the Council.
Page 1 of 1
McCollom, William
__ _ _ __ _.
__ __
__ __. ___
From: Scott G. Hawkins [shawkins@jones-foster.com]
Sent: Wednesday, October 18, 2006 8:12 AM
To: McCollom, William
Cc: Odum, Lorraine S.
Subject: Tequesta--memorandums re Money Laudering Task Force
Chief,
On Monday 10/16 I received your recent letter wherein you requested that I review two Memorandums of
Understanding required for the Village's participation in the State Attoerney Money Laundering Task Force and
the Sourth Florida High Intensity Financial Crimes Area Task Force. I have reviewed both memoranda and
wanted to provide a quick email indicating I approve as to legal form and sufficiency. I know this issue is time
sensitive, based on your convents last week, hence I wanted to send this quick email
I will follow-up with a formal letter for your file.
Let me know if you have any questions.
sgh
Scott G. Hawkins, Esq.
Board Certified in Business Litigation Law by the Florida Bar
Jones, Foster, Johnston & Stubbs, P.A.
Flagler Center Tower, Suite 1100
505 South Flagler Drive
West Palm Beach, FL 33401
(561) 659-3000
DID (561) 650-0460
Facsimile (561) 650-0436
shawkins~a~ jones-foster. com
www.fones-foster. com_
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1 oil gi2oo6
~Ol~
FOSTER
To~a~rsroN
8t S'TCTBBS, P.A.
Attorneys and Counselors
F1a~lerCenterTawer.Suite 1100
505 South Flagler Drive
West Falm Beach, Florida 33401
Telephone f561) 659-:30()0
Scott G. Hawkins, Esquire
Board Certified in Business Litigation Law by the Florida Bar
Direct Dial: 561-650-Q460
Direct Fax: 561-650-0436
E-Mail: shawkins@jones-foster.com
October 19, 2008
VIA E-MAIUPDF
William E. McCollom
Chief of Police
Tequesta Police Department
357 Tequesta Drive
Tequesta, FL 33469-0273
Nlcrilirt,~~ ~lddre ss
Post QlFice Box 3475
West Palm Beach, Fioridu 33402-3475
Re: Legal Review of Money Laundering Task Force Memorandum
Dear Chief McCollam:
This letter is written in response to your request of October 16, 2008 that I review two
separate memorandums of understanding required for the Village's participation in the
State Attorney Money Laundering Task Force and the South Florida High Intensity
Financial Crimes Area Task Force,. (Please Hate that the letter accompanying the
memorandums was dated September 11, 2006 but the materials were not received until
October 18. )
Per your request, I have reviewed the following:
A. MONEY LAUNDERING TASK FORCE MEMORANDUM OF UNDERSTANDING
between the Tequesta Police Department and the Office of the State Attorney-
This document is undated and is to be signed by Barry E. Krischer, State
Attorney and Wil{iam McCallom, as Chief of the Tequesta Police Department.
B. MEMORANDUM OF UNDERSTANDING BETWEEN ALL COOPERATING LAW
ENFORCEMENT AGENCIES relative to the South Florida High Intensity
Financial Grimes Area Task Force- This latter memorandum is undated and is to
be signed by Brian J. Wimpling, Special Agent in charge, Internal Revenue
Service, Criminal Investigations, Barry Krischer, State Attorney, Office of the
State Attorney, Palm Beach County, Jim Acree, AIC, State Attorneys Office,
Money Laundering Task Force, and Chief William McCollom, Tequesta Police
Department.
www. jorres foster co»r
William E. McCollom
Chief of Police
Tequesta Police Department
October 9 9, 2006
Page 2
Thank you for forwarding these materials to my office for review. I have reviewed both
memorandums and approve as to their legal form and sufficiency.
If there is any further action required in this regard, please advise.
Very truly yours,
JONES, FOSTER, JOHNSTON & STUBBS, P.A.
't f i .
Sca G. Hawkins, squire
SGH;ebg
P:IDOCS113153100001~L7R110T7650 DQG
VILLAGE OF TEQUESTA
VILLAGE COUNCIL MEETING AGENDA COVER/MEMORANDUM
Date Prepared: October 13, 2006
Meeting Date: November 09, 2006
CLASSIFICATION:
Subject/Agenda Item/Summary:
Approval of a Memorandum of Understanding that will allow the police department to
participate in the State Attorney Office of Palm Beach County Money Laundering Task Force.
This is a revenue sharing investigative task force managed by the Palm Beach County State
Attorney's Office.
STAFF RECOMMENDATION TO ®APPROVE DENY
Reviewed by: Costs: Attachments: Advertised:
(please list)
None Date:
1. Meeting Agenda
Routing Sheet Paper:
Funding Source: 2. Resolution 13-06/07 ^ Not Required
^ Operating
3. Memorandum of
^ Other (explain) Understanding Affected Parties:
(exhibit "A")
^ Notified (explain)
4. Correspondence with
Attorney Hawkins for
Legal Form and
sufficiency
Budget Acct. #
^ None ®Not Required
Submitted by: Originating Department: Village Manager Council Action:
Approval:
^ Approved
^Approved
w/conditions:
^ Denied
^ Tabled until:
RESOLUTION N0.13-06/07
A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF
TEQUESTA, PALM BEACH COUNTY, FLORIDA, APPROVING A
MEMORANDUM OF UNDERSTANDING FOR PARTICIPATION OF THE
TEQUESTA POLICE DEPARTMENT IN THE STATE ATTORNEY OF PALM
BEACH COUNTY MONEY LAUNDERING TASK FORCE AND A MEMORANDUM
OF UNDERSTANDING FOR PARTICIPATION OF THE TEQUESTA POLICE
DEPARTMENT IN THE INTERNAL REVENUE SERVICE - CRIMINAL
INVESTIGATION (IRS-CI) SOUTH FLORIDA HIGH INTENSITY FINANCIAL
CRIMES TASK FORCE AUTHORIZING THE VILLAGE MANAGER TO
EXECUTE THE SAME ON BEHALF OF THE VILLAGE.
WHEREAS, the Village Council of the Village of Tequesta recognizes that money laundering
is a serious and ongoing problem in the State of Florida and Palm Beach County.
WHEREAS, there exists a mutual interest in combating money laundering in Palm Beach
County.
WHEREAS, a coordinated law enforcement effort will be more effective in prosecuting these
crimes.
WHEREAS, the Village Council of the Village of Tequesta desires to cooperate with the State
Attorney's Office and the Internal Revenue Service (IRS-CI) thereby providing for the maximum
protection of the lives, safety and physical and mental well-being of the persons in the Village of
Tequesta against financial crimes.
NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE
VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS:
Section 1. The Memorandum of Understanding for the participation of the Tequesta Police
Department in the Palm Beach County State Attorney's Money Laundering Task Force, attached
hereto as exhibit "A", and the Memorandum of Understanding for the participation of the Tequesta
Police Department in the Internal Revenue Service -Criminal Investigation South Florida High
Intensity Financial Crimes Area Task Force, attached hereto as exhibit "B", is hereby approved and
the Village Manager is hereby authorized to execute the same on behalf of the Village of Tequesta.
THE FOREGOING RESOLUTION WAS OFFERED by Councilmember
who moved its adoption. The motion was seconded by Councilmember
and upon being put to a vote, the vote was as follows:
FOR ADOPTION AGAINST ADOPTION
RESOLUTION # 13/06-07
The Mayor thereupon declared the Resolution duly passed and adopted this day of
A.D., 2006.
MAYOR OF TEQUESTA
James Humpage
ATTEST:
Gwen Carlisle
Village Clerk
ONFICE OF THE
~' ~~~ ~ STATE ATTORNEY
~~ ~ aC`
~= FIFTEENTII JUllICIAI, CIRCUIT OF NLORIDA
~`'Op ~~ T""~ IN AND FOR PALM BEACH COUNTY
MONEY LAUNDERING TASK FORCE
MEMORANDUM OF UNDERSTANDING
TEQUESTA POLICE DEPARTMENT and THE OFFICE OF THE STATE ATTORNEY
The above agencies, recognizing the serious nature of the problem of money laundering in
South Florida and being cognizant of the mutual interests of the agencies to combat the problem,
agree as follows:
The agencies acknowledge the following:
I. Money laundering is a serious and ongoing problem in South Florida.
2. There exists a mutual interest in fighting money laundering in Palm Beach County.
3. A coordinated law enforcement effort will be more effective in prosecuting these
crimes.
Now therefore, it is agreed by and between the parties that:
PURPOSE
An enforcement initiative, hereinafter known as the Money Laundering Task Force
(MLTF) shall be started by the State Attorney's Office, 15"' Judicial Circuit, of and
for Palm Beach County, Florida to target and prosecute money launderers operating
in Palm Beach County.
AUTHORITY. RESPONSIBILITIES and WRITTEN AGREEMENTS
2. The primary operational concept of the MLTF will be to conduct long-term, criminal
conspiracy investigations designed to identify key violators and their place within the
criminal enterprises operating within this Judicial Circuit.
The operational focus of the MLTF will be, first and foremost, the prosecution of
violators followed by the seizure and forfeiture of assets associated with the criminal
enterprise.
Page I
401 N. Dixie Highway, West Palm Beach, Florida 33401-4209
(561)355-7100
ESTABLISHED ACCOUNTABILITY
4. The assigned officer(s) will adhere to a strict standard of ethical behavior consistent
with the highest standards of law enforcement. Each officer assigned to the MLTF
will be issued an MLTF Policies & Procedures handbook.
5. Developed or received intelligence information relevant to the investigation of money
laundering activity shall be shared between all participating agencies of the MLTF.
6. Investigations shall be conducted professionally, ethically and in a manner so that all
agencies can coordinate their efforts.
7. All participating agencies will share equally in any division of forfeited assets
derived through the MLTF cooperative initiative, unless alternative arrangements are
agreed upon by the agencies involved. All agreements are subject to any governing
regulations by federal or state authority.
The MLTF will report to the Office of State Attorney through the Agent-In-Charge
who will be an employee of the Office of State Attorney.
9. The MLTF will have a Board of Advisors made up of each participating agency's
Chief of Police or command staff designee. The purpose of the Board of Advisors
will be to provide policy guidance on the conduct of the MLTF. Each participating
agency will have one vote on any matter put before the Board and requiring a vote.
10. The Agent-In-Charge of the MLTF will work closely with the Board of Advisors to
ensure that the mission and intent of the organization is fulfilled and that each
participating agency is kept fully abreast of investigative developments.
IDENTIFIED RESOURCES and THE EVALUATION OF RESULTS
11. The MLTF shall be made up of at least one sworn law enforcement officer from each
participating law enforcement agency and a prosecuting attorney from the State
Attorney's Office.
12. Participation in the MLTF will commence at such time as the participating law
enforcement agency assigns afull-time sworn law enforcement officer to the MLTF.
Continued assignment to the MLTF will be at the sole discretion of the participating
agency.
13. Until such time as the MLTF becomes financially self-sufficient through seizures,
forfeitures, or permanent appropriations, all normal operating costs relating to
vehicles, communications( cell phones, hand-held radios, etc.), and the incumbent
maintenance costs will be directly borne by the participating agency.
14. The assigned officer(s) of the participating agency shall be the single point of contact
set up by each participating agency to facilitate cooperation.
Page 2
15. A written performance evaluation of the assigned officer and the officer's
contribution to the MLTF shall be executed annually and the results of that
evaluation will be shared with the assigned officer and his/her department supervisor.
TERM OF THIS AGREEMENT
16. This agreement maybe terminated by the Chief of Police of the participating agency
or the State Attorney at any time.
William McCollom
Chief
Date
Page 3
Barry E. Krischer
State Attorney
Date
401 N. Dixie Highway, West Palm Beach, Florida 33401-4209
(561)355-7100
SOUTH FLORIDA HIGH INTENSITY
FINANCIAL CRIMES AREA TASK FORCE
(SFHIFCATF)
MEMORANDUM OF UNDERSTANDING
BETWEEN ALL COOPERATING LAW ENFORCEMENT AGENCIES
This Agreement is made
2006 between the Internal Revenue
Service -Criminal Investigation (IRS-CI), the Office of the State Attorney, Money Laundering
Task Force, and the Tequesta Police Department. This memorandum of understanding is entered
pursuant to the authority vested in the Commissioner of the Internal Revenue Service Order 150-
10.
PURPOSE:
The purpose of this Agreement is to set forth the terms and conditions of the South Florida High
Intensity Financial Crimes Area (HIFCA) Task Force (hereinafter the "Task Force"). The Task
Force's initiatives are designed to address money laundering in this region through the Black
Market Peso Exchange, Bulk Cash shipments, Money remitters and transmitters, Check Cashing
establishments, and Financial Institutions involved in Major Financial Crimes. This multi-agency
Task Force will also serve as part of the South Florida Suspicious Activity Report Review Team.
It is our joint expectation that the cooperative efforts of all the law enforcement agencies in the
Task Force, the State Attorney's Office, and the United States Attorney's Office will also serve
as an excellent vehicle to meet the goals and objectives of the proposed High Intensity Financial
Crimes Area (HIFCA) designation.
MISSION OF THE TASK FORCE
The mission of the Task Force will be to disrupt, dismantle, or render ineffective organizations
involved in the laundering of the proceeds of all financial crimes in the South Florida area, which
includes transactions conducted throughout South Florida, the continental United States, Puerto
Rico, and foreign countries.
TERMS AND CONDITIONS OF THE TASK FORCE
The Task Force will combine the money laundering efforts of representatives of federal,
state and local agencies in the South Florida area and, as required, other venues. During
the period of their assignment, state and local law enforcement personnel will be under
the direct day-to-day supervision of the Agent in Charge (hereinafter the AIC) of the State
Attorney's Money Laundering Task Force with input from IRS-CID. Ultimate
responsibility for all Task Force personnel remains, however, with the parent agency of
the respective Task Force member.
2. Each Federal law enforcement agency will assign at least one Senior Special Agent to the
Task Force. Each local or state agency will assign at least one Senior Detective/Criminal
Investigator to the Task Force. AIC will be responsible for the daily management,
supervision and coordination of all investigatory and operational activities of the state and
local law enforcement personnel assigned to the Task Force.
Leaders (or representatives) of law enforcement agencies and prosecutors' offices
involved in Task Force investigations will meet regularly to discuss cases and strategies,
and, whenever necessary, any relevant issues of the Task Force.
2
4. Personnel from state and local law enforcement agencies assigned to the Task Force shall
be cross designated as Deputy United States Marshals, or other appropriate designation,
after receiving training and certification of the appropriate background investigation.
Each party to this agreement shall be liable for the acts and omissions of its own
employees.
Task Force personnel shall adhere to all Department of Treasury ("DOT") or Department
of Justice ("DOJ") policies and procedures (depending on their designation or parent
agency), except where DOT/DOJ policies and procedures are in conflict with the policies
and procedures of the Task Force members' parent agency. In these instances, the parent
agency will request in writing to the Task Force Team Leader that their employee follow
the policies and procedures of the parent agency. The leaders of the respective member
agencies will resolve any other disputes. To the extent there is any conflict between
Federal law and the laws of Florida, or other state, Federal law controls.
6. Task Force personnel will follow their parent agency's administrative reporting
requirements for time and attendance, payroll, etc.; but maybe subject to internal Task
Force reporting of time, attendance, and relevant activities.
7. Internal Revenue Service-Criminal Investigations with input from the HIFCA Task Force
AIC, will make the preliminary determination of the equitable sharing percentage for
participating agencies for all assets seized during the course of Task Force investigations.
This preliminary determination will be based on each participating agency's contribution
to the overall operations of the Task Force as well as the agency's contribution to the
individual seizure. All parties acknowledge, however, that the disposition of assets
forfeited under Federal law is within the discretionary authority of the Department of the
Treasury and the Department of Justice. The Internal Revenue Service will be the seizing
agency for all forfeitures pursuant to the HIFCA Task Force.
All money laundering leads and referrals to Task Force members from other task forces
and other sources will be coordinated through the Task Force AIC. The Internal Revenue
Service-Criminal Investigation SAC will have the final authority in any disputed situation
involving whether or not to initiate a HIFCA Task Force investigation.
9. All HIFCA Task Force investigations will be registered with the South Florida
Investigative Support Center and coordinated with the Money Laundering Coordination
Center (MLCC) and the Special Operations Division ("SOD"), if appropriate.
10. Pursuant to the High Intensity Drug Trafficking Area (HIDTA) Program Guidance, the
Task Force will pursue Organized Crime and Drug Enforcement Task Force (OCDETF)
case designations as appropriate.
11. The Task Force AIC will be responsible for the oversight and administration of any
Federal grants and budgeting responsibilities for the Task Force.
12. The Task Force headquarters will be located in a location where resources, information
and daily interaction can be accomplished.
13. When IRS-CI and the United States Attorney's Office are among the participants of a
multi-agency task force, and there is an investigative desire to obtain Form 8300
information pursuant to LR.C. § 6103 (1)(15), the procedure will be for the Assistant
United States Attorney (AUSA) assigned to the Task Force to request the information.
Safeguards will therefore be centralized with the AUSA. The IRS-CI participants fo the
4
Task Force will obtain the 8300 information and be able to share the Forms 8300 and
related information with other members of the HIFCA Task Force in accordance with
Dissemination Policies and Guidelines for Release of Information Reported Under the
Provisions of the Bank Secrecy Act, dated December 6, 1988, § IV.C.I. Form 8300
information obtained in this manner is for the Task Force use only and may not be shared
by participants of the Task Force to others in their agencies, who are not members of the
HIFCA Task Force.
14. As a result of obtaining an Ex-parte Order, should any member of the Task Force receive
federal tax returns, return information and/or taxpayer information, as those terms are
defined in I.R.C. § 6103, said information must be kept strictly confidential within the
Task Force and cannot be disclosed to anyone other than a member of the Task Force.
Any disclosure issues or disputes will be resolved by the IRS-CI Supervisory Special
Agent in conjunction with a representative of the United States Attorney's Office.
15. All media issues will be coordinated with the respective Special Agent in Charge (SAC)
offices and the respective agency representatives.
16. This Memorandum of Understanding shall be in effect from the date of execution until
2009. An annual review should be conducted to ensure
procedures and policies are adhered to. New investigative techniques and technology may
also be analyzed and implemented. The provision of paragraph four (4.) Will continue
until all potential liabilities have lapsed.
5
17. This Agreement maybe amended at any time by mutual written consent of all parties.
AGREED AND CONSENTED TO:
BRIAN J. WIMPLING, Special Agent in Charge
Internal Revenue Service, Criminal Investigations
BARRY KRISCHER, State Attorney
Office of the State Attorney, Palm Beach County
JIM ACRES, AIC, State Attorney's Office
Money Laundering Task Force
Chief WILLIAM McCOLLOM
Tequesta Police Department
Date
Date
Date
Date
6
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
STANDARD OPERATING PROCEDURE # 11.07
FINANCIAL CRIMINAL INVESTIGATIONS
EFFECTIVE: NOVEMBER 1, 2000
I. POLICY: The purpose of this procedure is to establish guidelines and criteria for conducting financial criminal
investigations. The guidelines set forth in this procedure will be used to identify acceptable practices and methods
during financial criminal investigations, including preliminary steps prior to case assessment. While conducting
criminal investigations, investigators will comply with all constitutional requirements. The investigative process may
include interviews and interrogations, identifying, collecting, and preserving physical evidence, and surveillance.
II. DEFINITION
A. Case Assessment-The period of evaluation marking the time between when information is first received and
when that information results in the opening of a financial criminal investigation.
B. Crime Scene -The location where the crime occurred or where the indication of the crime exists. It includes
the area where the crime was committed and any portion of the surrounding area over, or through which the
suspect or victim passed en route to, or going away from the scene of the crime and/or any record information
or data trail that reflects evidence of a crime.
C. Financial Criminal Investigation-Suspected violations of law relative to any criminal activity (i.e.: narcotics,
fraud, theft, etc.) that shows the potential for identifying the proceeds of criminal enterprise within the MLTF
jurisdiction.
D. Money Laundering Task Force lMLTF,~-The State Attorney's Office multi-agency task force comprised of duly
constituted law enforcement agencies in the 15~' Judicial Circuit (Or surrounding circuits) who have a contributed
staffing towards conducting financial investigations of criminal activities in violation of state and/or federal
statutes. The MLTF shall be directed by a sworn law enforcement officer assigned fro the SAO Investigations
Division. The MLTF membership will be governed by a Memorandum of Understanding (MOU) between the
State Attorney and the chief (or sheriff) of the cooperating agency.
111. PROCEDURE: Investigators of the State Attorney's Office shall perform certain functions at the scene of a crime
and potential criminal investigations that are both preliminary and follow up.
IV. PRELIMINARY INVESTIGATIONS:
A. The steps to be followed when conducting preliminary investigations include, but not limited to:
1. Observing all conditions, events and remarks;
2. Locating and identifying witnesses;.
3. Maintaining and protecting the crime scene and witnesses;
4. Interviewing complainants and witnesses;
5. Identifying and interview the suspect, if possible;
6. Arranging for the collection of evidence;.
7. Effecting the arrest of the suspect, and;
Hays 1
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
8. Report the incident fully and accurately.
V. FOLLOW-UP INVESTIGATION
A. The steps to be followed in conducting afollow-up investigation shall include, but are not limited to:
1. Reviewing and analyzing all previous reports prepared in the preliminary phase.
B. The procedure to accomplish this shall include but not limited to:
Reviewing agency records and documentation related to the case:
a. Police reports
b. Affidavits
c. Latent evidence reports
d. Arrest affidavits
e. Any other supplemental information.
C. Contact the evidence unit and request copies of all evidence sheets pertaining to the case.
D. Conduct additional interviews.
1. Determine who needs to be interviewed;
2. Determine how to contact the person to be interviewed:
a. Telephone
b. In person
c. Other
3. Determine the goal of the interview.
4. Determine the type of interview to be conducted;
a. For victim and/or witnesses
1. Apre-interview is used to determine is a formal interview is required.
2. A formal interview is described as being a sworn statement, written statement, or a videotaped
interview.
b. For suspects there are two types of interviews:
1. In custody-when considering as in custody interview the investigator shall determine:
a. The suspects location
b. The suspect accessibility
c. If Miranda Rights have been given
d. If not given the investigator shall administer Miranda Rights
e. If the suspect has received Miranda, the investigator shall determine if the suspect has
waived or not waived his rights
f. If the suspect has not waived his Miranda Rights, no interview shall be conducted
g. If the suspect has waived his Miranda Rights, the investigator may conduct the interview
h. Documentation of the interview shalt be based on the cooperation level of the suspect.
2. Not in custody:
a. The investigator shall determine the location of the suspect
b. The investigator shall determine the accessibility of the suspect
c. The investigator shall determine the need to Mirandize the suspect
d. The investigator shall determine the criminal history of the suspect
e. The investigator shall formulate a strategy to conduct the interview/interrogation and
consider the following facts:
1. Does probable cause to arrest exist;
IIays 2
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
2. What is the risk of violence;
3. What is the risk of flight or escape;
4. Method to be used to contact the suspect;
5. Location to contact the suspect.
5. Investigators shall be aware that other sources of information are available when conducting follow-up
investigations. Sources to be considered when seeking additional information are, but not limited to:
a. Police officers
b. Informants
c. FCIC/NCIC
d. AFIS (Automated Fingerprint Information System)
e. Auto Trac
f. Pawn shop records
g. Medical records
h. PALMS/CLERKS computer systems
i. Other agencies
j. The Internet
k. Medical Examiner
I. SFISC (South Florida Investigative Support Center)
m. Newspapers
6. The investigator shall determine if any laboratory results are pertinent to the case.
a. If not pertinent, the laboratory reports shalt be filed with the case file
b. If any of the laboratory reports indicate that evidence is pertinent to the case;
a. Determine if further examination of the evidence is necessary and follow up as needed.
b. When no further laboratory work is needed, insure the evidence is secured in accordance with
established policy and procedure.
c. Laboratory documents shall be secured with the evidence.
7. During the course of an investigation there may be some information that needs to be disseminated.
When an investigator determines that information regarding the case needs to be disseminated or
distributed, the investigator shall determine and pursue the manner of dissemination. Some methods are,
but not limited to:
a. FCIC/NCIC Teletype messages
b. BOLO
c. Telephone
d. Department web site
e. Public Information Office
8. When an investigator finds it necessary or desirable to conduct a search in the course of an investigation,
the investigator shall actin accordance with agency policy and procedure and applicable State and Federal
Laws.
9. In the process of identifying and apprehending suspects an investigator may use one or more of several
techniques. The following techniques are authorized, at a minimum:
a. FCIC/NCIC
b. Criminal history records
c. Intra-agency communications
d. Mufti-agency communications and groups
e. State Attorney's Office database
10. The collection of evidence at a crime scene shall be accomplished in accordance with agency policy and
procedures.
IIaya 3
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
11. An investigator may determine the involvement of a suspect(s) in other crimes by use of one or more of
the following methods:
a. Latent fingerprint comparison
b. Photo line-up
c. Live line-up
d. Handwriting comparison
e. Witness/victim statements
f. Interrogations/confessions
g. Surveillance
h. On-scene identification
i. Checking suspects criminal histories
12. During the course of an investigation, investigators shall check the criminal history of the suspect. This
can be accomplished in a number of ways:
a. FCIC/NCIC
b. Agency records
13. From the moment an investigator is assigned a case, the investigator shall be aware that one of the
major goals of the investigation is court presentation of the evidence. Keeping this in mind the investigator
shall:
a. Organize the case file in a clear and logical format
b. Insure all listed pertinent evidence is available
c. Review the case file
d. Compile a case filing packet and forward the packet to the Intake Division
14. In order to assist in the prosecution of the case, the investigator shall:
a. Provide whatever assistance may be required
b. Respond in a timely manner to communications from the prosecutor
15. The constitutional rights of the suspect during a criminal investigation cannot be violated. In order to
assure compliance with constitutional requirements during criminal investigations, investigators are directed
by agency policy and procedure and FSS 901.
VI. SURVEILLANCE: Occasionally it may become necessary or desirable for investigators to conduct surveillance.
The following guidelines and provisions are established for such a case and shall be considered in a surveillance
plan. A surveillance supervisor shall be designated.
1. Analyzing crimes and crime locations;
a. Determine which investigators are to handle the surveillance
b. Review all reports and documentation related to the suspect
c. Review criminal histories(when the suspect is known)
d. Gather and review information and data from other intelligence sources.
2. Identifying and analyzing possible suspects and their habits, associates, vehicles, methods of operation,
or any other pertinent information;
a. Review all reports and intelligence data
b. Use Auto Trac for gathering information
c. Utilize other intelligence sources, ie. Department of Justice, FDLE, etc.
3. Familiarizing the investigators with the neighborhood or target areas;
a. All involved investigators shall review the case file with the surveillance team
b. Surveillance participants should do a drive-by of the area to be surveilled if appropriate
c. The entire surveillance team should be supplied with the documentation and information necessary
for the surveillance
4. Determining operational procedure for observation, arrests, and the actual surveillance;
Mars 4
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
a. The supervisor shall determine which investigators will be involved in the operation
b. The supervisor shall determine who will be in charge and who is to be in command under all
anticipated circumstances
c. The supervisor shall review, with the team, all contingency plans
5. Establishing a means of communications;
a. At the surveillance briefing the type of communications will be determined; in addition,
b. Radio frequencies and telephone numbers will be established; and
c. Beeper numbers and transmitting frequencies for body-bugs(Unitel) shall be established
6. Selecting vehicle and equipment;
a. At the surveillance briefing the supervisor shall determine which vehicle are to be used and insure
that all team members are aware of same
b. The supervisor shall determine what equipment is needed and insure that all members are properly
equipped
7. The supervisor shall establish a schedule to insure that all members of the surveillance team are relieved
regularly.
8. The supervisor shall be aware that resources are available when legal ramifications are a consideration.
When in doubt, the supervisor shall contact the on call Assistant State Attorney. The supervisor shall insure
that legal aspects are considered and met.
9. The supervisor shall draw expense funds from the Chief Investigator, when appropriate.
VI. UNDERCOVER OPERATIONS: Occasionally it may become necessary or desirable for investigators to conduct
undercover operations. All such operations shall be closely supervised and must have prior approval of the Chief
Investigator. In the event an undercover operation is anticipated a written plan shall be formulated. The undercover
plan shall include, but is not limited, to the following provisions:
1. Identifying and analyzing suspects;
a. Determine which investigator is to handle the surveillance
b. Review all reports and documentation related to the suspect
c. Review criminal histories(when the suspect is known)
d. Gather and review information and data from other intelligence sources.
2. Making contact with the suspect;
a. The first consideration when planning and executing an undercover operation is and shall be in all cases,
officer safety
b. The back -up team shall maintain contact with the undercover investigator
c. The officers involved in the operation shall develop contingency plans
3. Analyzing neighborhood or target areas where investigators will work;
a. All involved investigators shall review the case file with the undercover team
b. Undercover personnel should do a drive-by of the area to be surveilled if appropriate
c. All investigators involved in the operation shall be supplied with the documentation and information
necessary for the operation.
4. Suppling investigators with false identification and/or necessary credentials requires prior approval of the
Chief Investigator. A record of all false identifications, obtained by investigators, will be maintained by the Chief
Investigator or his designee. These records are to be confidential and not released without the approval of the
Chief Investigator. The resources for obtaining false identification include, but are not limited to;
a. Florida State Division of Motor Vehicle
b. Prison identification from the Department of Corrections
c. Credit cards(with State Attorney's approval)
Hays 5
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
5. The supervisor shalt draw expense funds from the Chief Investigator.
6. The supervisor shall determine what equipment is needed and insure that all members are properly equipped.
7. Establishing means for routine and emergency communications;
a. At the undercover operation briefing the type of communications will be determined; in addition,
b. Radio frequencies and telephone numbers will be established
c. Beeper numbers and transmitting frequencies for body bugs(Unitel) shall be established; and
d. A prearranged signal shall be determined in the event of an emergency.
8. Determining legal ramifications;
a. The supervisor shall be aware that resources are available when legal ramifications are a consideration.
When in doubt, the supervisor shall contact the on call Assistant State Attorney.
b. The supervisor shall insure that legal aspects are considered and met.
9. Guidelines for arrest are covered in SOP # 2.03 Arrest Procedures. The investigator will ensure that the
rights of the suspect are not violated by adhering to all Federal and State Statutes.
10. The supervisor in charge of the undercover operation shall insure that sufficient manpower is available for
operational security. This shall include a briefing with the back-up officers.
11. A supervisor shall be involved in all undercover operations while they are ongoing.
VII. DECOY OPERATIONS; Occasionally it may be necessary or desirable for investigators to conduct a decoy
operation. All such operations shall be closely supervised and must have prior approval of the Chief Investigator. In
the event a decoy operation is anticipated a written plan shall be formulated. Copies of the plan shall be forwarded to
the Chief Investigator. The Chief Investigator shall designate the operation supervisor. The decoy plan shall
address, but is not limited to, the following provisions;
1. Analyzing victims, crimes, and crime locations;
a. Determine which investigator(s) are to handle the decoy operation
b. Review all reports and documentation related to the operation
c. Review criminal histories(when the suspect is known)
d. Gather and review information and data from other intelligence sources.
2. Disguising investigators to resemble victims;
a. The supervisor in charge of the decoy operation shall insure that the decoy investigator is properly
equipped and disguised.
b. Funds may be available for the purchase of decoy disguises.
3. Determining the number of back-up investigators for security and protection;
a. At the decoy operation briefing the operation supervisor shall determine the number of back-up
investigators to be used
b. Once established, the security of the decoy operation shall not be comprised
4. Developing operational procedures, such as observation and arrest;
a. The supervisor in charge of the decoy operation shall insure that there is constant visual contact with the
decoy investigator
b. Investigators involved in decoy operations shall be familiar with agency policy and procedure regarding
decoy operations
c. The supervisor:
1). Will analyze the area of activity, will determine the location/site of the operation. The area selected
shall enable the police units to control the suspect(s) or vehicle movement when effecting the arrest
2). Will ensure there is a unobstructed view of the undercover investigator and constant visual contact is
maintained
3). Will monitor the undercover investigator at all times
IIaye 6
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
4). Will test the monitoring equipment prior to the commencement of the operation. The range of the
monitoring device will be established and the undercover investigator will be advised of the range
5). Will determine when the crime has been consummated and when the surveillance investigators will
move in to effect the arrest
6). Will conduct a briefing for all participating investigators and give them their assignments. The
briefing will also allow participating investigators the opportunity to view the undercover investigator so
that there is no confusion when effecting the arrest
7). Will notify PBSO Communications Supervisor and local law enforcement agencies of the location of
the operation
d. Establishing Communications;
1). At the decoy operation briefing the type of communications will be determined; in addition,
2). Radio frequencies and telephone numbers will be established
3). Beeper number and transmitting frequencies for body bugs(Unitel) shall be established; and,
4). A prearranged signal shall be determined in the event of an emergency
e. Determining Legal ramifications;
1). The decoy operation supervisor shall be aware that resources are available when legal ramfications
are a consideration. When in doubt, the supervisor shall contact the on call Assistant State Attorney
2). The supervisor shall insure that legal aspects are considered and met
f. The supervisor in charge of the undercover operation shall insure that sufficient manpower is available for
the operational security. This shall include a briefing with the back-up investigators.
g. The decoy operation supervisor shall notify local law enforcement of the operation by either telephone or
in person that the operation will be underway in their area.
h. A supervisor shall be involved in all decoy operations while they are ongoing.
VIII. CASE FILES:
A. Types of records to be maintained by investigators will include preliminary investigations report, statements,
and any other information pertaining to the assigned case. Original case documents will be filed with the
Investigations Division on an ongoing basis.
B. Accessibility to files will be authorized by the appropriate supervisor for those investigators with the need to
know or for those who may benefit from such files.
C. Each investigator will control and maintain his/her case files for all open assigned cases.
D. Cases designed as closed, exceptionally cleared, inactive, or unfounded will be maintained in the
Investigations Division.
E. The appropriate supervisor may review a investigator's case log, the initial case assignment or check the
close out case 1•Ile when handling requests made on the status of a case should the assigned investigator be
unavailable.
F. Physical evidence and the original Evidence/Property Sheet will be maintained by the Property and Evidence
Unit.
G. Photographs generated by agency personnel will be maintained in the case file.
H. The purging of original case files, supplements and pertinent information will be in accordance with applicable
existing state law. Copies of records and copies of pertinent case documents may be maintained by the
assigned investigator at his/her discretion and in compliance with public records laws.
Mars 7
OFFICE OF THE STATE ATTORNEY
FIFTEENTH JUDICIAL CIRCUIT
Barry Krischer, State Attorney
IIarE 8
~Jf,\`.
'`~ '`~~~ Financial Crimes Enforcement Network
., Department of the Treasury
,_~,~,~
October 10, 2006
FinCEN's 314(a) Fact Sheet
Section 314(a) of the USA PATRIOT Act of 2001 (P.L. I07-56)', required the Secretary
of the Treasury to adopt regulations to encourage regulatory authorities and law
enforcement authorities to share with financial institutions information regarding
individuals, entities, and organizations engaged in or reasonably suspected, based on
credible evidence, of engaging in terrorist acts or money laundering activities. FinCEN
issued a proposed rule on March 5, 2002, and the final rule on September 26, 2002
(67 Fed. Reg. 60,579). Section 314(a) requirements are now published in 31 CFR Part
103.100.
Overview
FinCEN's regulations under Section 314(a) enables federal law enforcement agencies, through
FinCEN, to reach out to more than 45,000 points of contact at more than 27,000 financial
institutions to locate accounts and transactions of persons that may be involved in terrorism or
money laundering.
FinCEN receives requests from federal law enforcement and upon review, sends requests to
designated contacts within financial institutions across the country once every 2 weeks via either
a secure Internet web site or via facsimile. The requests contain subject and business names,
addresses, and as much identifying data as possible to assist the financial industry in searching
their records. The financial institutions must query their records for data matches, including
accounts maintained by the named subject during the preceding 12 months and transactions
conducted within the last 6 months. Financial institutions have 2 weeks from the transmission
date of the request to respond to 314(a) requests. If the search does not uncover any matching of
accounts or transactions, the financial institution is instructed not to reply to the 314(a) request.
FinCEN began processing 314(a) requests in November 2002. This system was temporarily
suspended, based on feedback from system users. Following extensive consultations, FinCEN
issued FAQ's to implement and streamline the process and resumed operation of the system in
February 2003. Since that time, as with any new system, the process continues to be fine-tuned.
On March 1, 2005, FinCEN ceased notifying the financial industry with a-mail attachments and
began posting 314(a) requests on a secure Internet site.
' Section 314 is reprinted in the Historical and Statutory Notes to 31 U.S.C. § 5311.
The Process
Through an expedited communication system, FinCEN's 314(a) process enables an investigator
to canvas the nation's financial institutions for potential lead information that might otherwise
never be uncovered. The focus quickly zeros in on relevant locations and activities. This
cooperative partnership between the financial community and law enforcement allows disparate
bits of information to be identified, centralized and rapidly evaluated.
It is important to note, however, that Section 314(a) provides lead information only and is not a
substitute for a subpoena or other legal process. To obtain documents from a financial institution
that has reported a match, a law enforcement agency must meet the legal standards that apply to
the particular investigative tool that it chooses to use to obtain the documents.
To ensure that Section 314(a) inquiries are being used only for appropriate cases, FinCEN's
Section 314(a) process requires federal law enforcement to provide assurances that the request
has been subject to appropriate scrutiny at the agency level and that the matter under
investigation satisfies FinCEN's standards for processing a formal Section 314(a) inquiry.
FinCEN requires all requesters to submit a form certifying that the investigation is based on
credible evidence of terrorist financing or money laundering.
Criteria for Money Laundering Requests
Because money laundering encompasses such a wide range of underlying criminal activity,
agencies must determine that a money laundering case is significant before submitting a 314(a)
request to FinCEN. To ensure that this standard is met, FinCEN requires documentation
showing the size or impact of the case, the seriousness of the underlying criminal activity, the
importance of the case to a major agency program, and any other facts demonstrating its
significance.
In addition, law enforcement must certify in cases involving money laundering that all traditional
means of investigation have been exhausted. The support for the assertion that other
investigative alternatives have been exhausted or are unavailable must be provided in the form
submitted to FinCEN for review prior to the request being submitted to financial institutions by
FinCEN.
To date, the 314(a) process already has proved to be successful, as illustrated below.
Results have yielded productive leads for both terrorist financing and money laundering
investigations. The immediate matches have, for example, led to the identification of
new accounts, transactions, indictments, etc. and enabled law enforcement to efficiently
direct its use of legal processes to promptly obtain critical evidence in numerous cases.
Examples of 314(a) requests, based on money laundering, include:
Hawala operation involving a sanctioned country
Arms trafficking
Alien smuggling resulting in fatalities
• Cigarette smuggling
• Nationwide investment fraud with many victims
• International criminal network involved in identity theft and wire fraud
• Multi-agency investigation of drug trafficking rings
Results
The 314(a) system has processed 570 requests submitted by seventeen Federal agencies from
November 1, 2002 -October ] 0, 2006. Federal law enforcement organizations (LE) have
submitted cases in the conduct of the following significant criminal investigations:
Terrorism/TerroristFinandng - 202 cases
Money Laundering - 368 cases
(i vovzooz - ~oiioi2oo6>
The investigations identified 4,803 subjects of interest. Of these, financial institutions
(FI) responded with 32,441 total subject matches: 31,403 positive and 1,038
inconclusive.
Feedback from Law Enforcement
The 314(a) feedback from the law enforcement requesters has been overwhelmingly
positive and has resulted in the discovery and/or issuance of the following:
2,155 New Accounts Identified
3,267 New Transactions
1,376 Grand Jury Subpoenas
19 Search Warrants
336 Administrative Subpoenas/Summons/Other
92 Arrests
103 Indictments
10 Convictions
$20,560,239.64 Total Dollar Amount Located
~~ vov2ooz - ioiioizoo6>
What is a HIFCA?
High Risk Money Laundering and Related Financial Crimes Areas or HIFCAs
were first announced in the 1999 National Money Laundering Strategy and
were conceived in the Money Laundering and Financial Crimes Strategy Act of
1998 as a means of concentrating law enforcement efforts at the federal,
state, and local levels in high intensity money laundering zones.* HIFCAs
may be defined geographically or they can also be created to address money
laundering in an industry sector, a financial institution, or group of financial
institutions.
What is the purpose of a HIFCA?
The HIFCA program is intended to concentrate law enforcement efforts at the
federal, state, and local level to combat money laundering in designated
high-intensity money laundering zones. In order to implement this goal, a
money laundering action team will be created or identified within each HIFCA
to spearhead a coordinated federal, state, and local anti-money laundering
effort. Each action team will: (1) be composed of all relevant federal, state,
and local enforcement authorities, prosecutors, and financial regulators; (2)
focus on tracing funds to the HIFCA from other areas, and from the HIFCA to
other areas so that related investigations can be undertaken; (3) focus on
collaborative investigative techniques, both within the HIFCA and between
the HIFCA and other areas; (4) ensure a more systemic exchange of
information on money laundering between HIFCA participants; and (5)
include an asset forfeiture component as part of its work.
How are HIFCAs designated?
The statute mandating HIFCAs sets forth an extended list of factors that
must be considered in designating a HIFCA. These factors encompass three
general categories of information:
1. demographic and general economic data;
2. patterns of BSA filings and related information; and
3. descriptive information identifying trends and patterns in money laundering activity
and the level of law enforcement response to money laundering in the region.
*The Money Laundering and Financial Crimes Strategy Act of 1998, P.L. 105-310 (October 30, 1998)
(the "1998 Strategy Act"), which calls for the designation of certain areas as areas in which money
laundering and related financial crimes are extensive or present a substantial risk shall be an element
of the national strategy developed pursuant to section 5341(b) of the Act. See 31 U.S. Code 5341(b)
and 5342(b).
How to apply for HIFCA Designation.
HIFCA designations will be selected from localities that submit applications
through FinCEN or from candidates proposed on the initiative of the
Secretary of the Treasury or the Attorney General. Prospective localities
wishing to be considered for HIFCA designation should submit a request for
HIFCA designation in writing to the Director of FinCEN at the Financial Crimes
Enforcement Network, Post Office Box 39, Vienna, Virginia 22183. The
following information must be addressed in the letter:
• description of the proposed area/entity/industry;
• the focus and plan for the counter-money laundering projects that the designation
will support;
• the reasons such a designation is appropriate taking into consideration the relevant
statutory standards; and
• designate a point of contact.
Applications will be reviewed by the HIFCA Designation Working Group, co-
chaired by the Departments of the Treasury and Justice and composed of
senior officials of the Criminal Division of the Department of Justice, the FBI,
the DEA, IRS-CID, U.S. Customs Service, FinCEN, U.S. Secret Service, the
United States Postal Inspection Service, and other appropriate agencies. The
Working Group will consider and provide appropriate advice to the Secretary
and the Attorney General regarding the applications. All applicants will be
notified in writing regardless of whether they were accepted for HIFCA status
or not.
U.S. Department of Justice
Office of Justice Programs , ~,'
Money Laundering Offenders,
1994-2001
Mark Motivans, Ph.D.
BJS Statistician
During 2001, 1,477 defendants were
charged in U.S. district courts with
money laundering as the most serious
offense filed. These defendants
comprised 1.8% of all cases filed
in U.S. district courts.
Of cases concluded in 2001, 1,243
defendants were convicted of a money
laundering offense.' Federal defen-
dants sentenced for money laundering
in 2001 were convicted of laundering
amounts ranging from less than $2,000
to more than $100 million.z About 20%
of the cases involved over $1 million.
Offenders convicted of money launder-
ing face prison terms of up to 20 years,
fines up to $500,000 or twice the value
of the property involved, and possible
criminal and civil forfeiture related to the
value of the property or funds involved.
Federal money laundering statutes
differentiate between monetary record
and reporting offenses requiring finan-
cial institutions to maintain reports and
records of financial transactions
'Money laundering is defined as "the process by
which criminals or criminal organizations seek to
disguise the illicit nature of their proceeds by
introducing them into the stream of legitimate
commerce and finance." 2000-2005, Strategic
Plan. U.S. Department of the Treasury, page 1.
ZMonetary instruments include U.S. or foreign
coins and currency, travelers' checks, personal
checks, bank checks, money orders, investment
securities and negotiable instruments
(18 U.S.C. § 1956 (c)(5)).
From 1994 to 2001 almost 18,500 defendants faced a money
laundering-related charge filed in a U.S. district court
Number of defendants with money laundering
as any offense charged
3,000
Laundering/
racketeering (Title 18-
2,000
1,000
Monetary record and
reporting (Title 31)
0
1994 1996 1998 2000 2001
Source: Administrative Office of the U.S. Courts, criminal master file, fiscal year.
• Between 1994 and 2001 about
18,500 defendants were charged in
U.S. district court with money launder-
ing as any charge. Over this same
7-year period, 10,610 were charged
with money laundering as the most
serious offense filed; 9,169 money
laundering defendants were
convicted.
• Nearly half of all Federal money
laundering matters were referred in
the six geographic areas defined as
High Intensity Financial Crimes Areas
by the U.S. Departments of Treasury
and Justice.
• About 60% of laundering/racketeer-
ing (Title 18) offenses prosecuted
involved an underlying property
offense (embezzlement or fraud);
about 17% involved drug trafficking;
and about 7% involved racketeering
or violations of customs laws.
• About 9 in 10 defendants prosecuted
for money laundering were convicted,
with 9 in 10 convictions occurring by
guilty plea. Nearly 3 out of 4 convicted
defendants received a prison term,
with the average sentence of just
over 4 years.
• In 2001 the 22 commercial defen-
dants charged with money laundering
included auto dealerships, grocery
stores, banks, furniture stores,
construction firms, and beauty shops.
They represented a small fraction
of money laundering defendants.
July 2003, NCJ 199574
Federal Justice Statistics Program
Selected Federal money laundering statutes
Money laundering offenses in this report
are defined according to Title 18 (Chapter
95, Racketeering) and Title 31 (Chapter
53, Monetary Transactions) of the
Federal criminal code:
Title 18 statutes
(Laundering/racketeering)
Laundering of monetary instruments
(18 U.S.C. § 1956) involves intending
to transport or transfer monetary funds
knowing that property represents the
proceeds of unlawful activity.
Engaging in monetary transactions in
property derived from specified unlaw-
ful activity (18 U.S.C. § 1957) involves
knowingly engaging in a monetary
transaction involving criminally derived
property valued at more than $10,000.
Prohibition of unlicensed money
transmitting businesses (18 U.S.C. §
1960) involves failing to comply with
Treasury regulations (that is, business
registration and other required in#orma-
tion) pertaining to money transmitting
businesses (that is, currency dealers and
exchangers, check rashers, and money
transmittal businesses).
Title 31 statutes
(Monetary record and reporting)
Reporting on exporting and importing
monetary instruments (31 U.S.C. §
5316) involves the failure to file a Report
of International Transportation of Curren-
cy or Other Monetary Instruments (CMIR)
when conveying such instruments of
more than $10,000 at one time out of,
into, or through the United States.
Structuring transactions to evade
reporting requirement (31 U.S.C. §
5324) involves causing a domestic finan-
cial institution to fail to file a required
report or to file a report that contains an
omission or misstatement of fact, or to
structure any transaction. Structuring
involves conducting financial transactions
with the purpose of evading reporting
requirements (that is, "breaking down a
single sum of currency exceeding
$10,000 into smaller transactions to
evade reporting requirements"). See 31
C.F.R. 103.11.
Failure to file a currency transaction
report (CTR) on cash transactions
involving more than $10,000 (31 U.S.C.
§ 5313) .
involving more than $10,000 (originat-
ing from the 1970 Bank Secrecy Act)3
and laundering/racketeering offenses in
which financial transactions involve the
proceeds of specked unlawful activities
(originating from the Money Laundering
Control Act of 1986).' The monetary
record and reporting statutes focus on
tracking illicit assets via financial institu-
tion reporting requirements while the
laundering/racketeering statutes focus
on the conversion of illicit assets and
their use to promote additional crimes.
The bulk of Federal money laundering
enforcement focuses on the underlying
criminal offenses that produce the
funds to be laundered. law enforce-
ment uses a "follow-the-money"
approach to trace illicit proceeds from
such crimes as drug trafficking, health
care fraud, and terrorism.s U.S. attor-
neys may apply the laundering/racket-
eering statutes when a financial trans-
action involves the proceeds and/or
concealment of the source of proceeds
for any of over 250 offenses or "speci-
fied unlawful activities" (SUA's).6
331 U.S.C. §§ 5311-5332.
°18 U.S.C. §§ 1956, 1957, and 1960.
SSee Lester M. Joseph, "Money Laundering
Enforcement: Following the Money," Economic
Perspectives: An Electronic Journal of the U S.
Department of State, 6, 2, 2001, and R.T. Nay-
lor, Follo-wthe-Money Methods in Crime Contra!
Policy, Nathanson Centre of Organized Crime
and Corruption, York University, Toronto, 1999.
eSee Money Laundering Statutes and Related
Materials, Asset Forfeiture and Money Launder-
ing Section, U.S. Department of Justice, April
2002.
This report uses data from the Federal
Justice Statistics Program (FJSP) to
describe the criminal case processing
of money laundering offenders in the
Federal criminal justice system. Unless
indicated otherwise, the designations
"lead charge"' and "primary" or "most
serious filing offense a describe money
laundering violators across prosecu-
tion, adjudication, and sentencing. The
exception to these designations occurs
where money laundering is described
as any offense filed in U.S. district
court. (See Highlights figure.)
During 2001 the laundering/racketeer-
ing statutes comprised the bulk of
defendants charged with a money
laundering offense as the most serious
offense (&4%). Three in five of these
Title 18 money laundering violations
were associated with property-related
SUA's such as bank embezzlement,
fraud, transportation of stolen property,
and counterfeiting (63%). Drug traffick-
ing offenses were the second most
common SUA's (16%), followed by
public-order (7%) (including racketeer-
ing, witness tampering, customs laws,
'"Lead charge" is the substantive statute that
is the primary basis for investigation by U.S.
attorneys and is not necessarily the charge
with the greatest potential sentence.
e"Most serious offense" is the filing offense that
yields the statutory maximum penalty. See the
methodology section in the Compendium of
Federal Justice Statistics, 2000 (NCJ 194067).
and other offenses) and violent
offenses (4%).9
In 2001 monetary record and reporting
offenses made up the remaining 16%
of defendants charged with a money
laundering offense. Monetary record
and reporting offenses do not require a
specified unlawful activity or underlying
offense. Rather, these Bank Secrecy
Act (BSA) statutes, by requiring
records of currency transactions,
provide a paper trail which enables
enforcement agencies to uncover the
illicit concealment of monetary instru-
ments. In addition to financial institu-
tions, BSA reporting requirements
apply to securities brokers and dealers,
casinos, and money exchange
businesses.10
Referrals to U.S. attorneys
for prosecution
During 2001, 1,437 suspects were
referred to U.S. attorneys with money
laundering as the lead charge (down
34.4% from 2,191 referrals in 1994).
These suspects comprised 1.2% of the
total 121,818 referred. Money launder-
ing included 1,073 defendants investi-
gated for laundering/racketeering
9Title 18 money laundering counts generally
involve a SUA. Information on SUA's was
missing in 10% of cases due in part to sting
cases in which an associated unlawful activity
does not apply (18 U.S.C. § 1956(a)(3)) andlor
instances in which information was not recorded
during court processing.
1031 C.F.R. 103.
2 Federa/ Justice Statistics Program
Targeting money laundering enforcement efforts
High Intensity Financial Crimes Area (HIFCA) designations were
enacted as a part of the Money Laundering Strategy Act of 1998,
(P. L. 105-310) to prioritize law enforcement efforts in areas
where money laundering and related financial crimes present a
greater need.
To date, the Secretary of the Treasury and the Attorney General
have named six HIFCA's:
• New York/New Jersey
• San Juan/Puerto Rico
• Los Angeles
• the southwestern border including Arizona and Texas
• the Northern District of Illinois (Chicago)
• the Northern District of California (San Francisco).
Of the 1,437 matters referred to U. S. attorneys where money
laundering was the lead charge, 625 (44%) were referred from
judicial districts associated with an HIFCA designation.
Related to HIFCA's are the High Intensity Drug Trafficking Areas
(or HIDTA's). Congress established the HIDTA program to
operate under the direction of the Office of National Drug Control
Policy (ONDCP) by the Anti-Drug Abuse Act of 1988
(P.L.100-690) and the ONDCP Reauthorization Act of 1998.
HIDTA's were created to counter drug trafficking in areas
where drug enforcement needs are greatest to include the money
laundering-drug trafficking nexus. All six HIFCA's were also desig-
nated as HIDTA's.
Matters referred to U.S. attorneys with money
laundering as most serious charge, by Federal judicial
district, 2001
5.~
N..,Yarkl
New Jersey
..-
Los Angeles
!San Juan, PR
~-
Southwest.Sorder J
.e .~
fl Number referred
..- n No referrals ~ 26 t° 75
U , to 25 ~ 75 to 200
Source: Executive Office Por the U.S. Attorneys, central system file
10 Federal judicial districts with largest number of matters referred with money laundering
as most serious charge, 2001
Money Percent of money laundering matters referred by offense type
Total Number laundering
of money matters as
number laundering a percent of Title 18
of matters matters all matters Monetary record percent
Judicial district referred referred referred Laundering/racketeering and reporting of total
Southem Distract of Florida 3,880 106 2.7% ~ 75%
Southem District of New York 3,160 83 2.6 ~ 84
District of Puerto Rico 1,724 78 4.5 _~ _ ~ 63
Eastern District of New York 2,838 71 2.5 -- - - ~ 46
Southern District of Texas 6,075 64 1.1 ~ ~
78
Middle District of Florida 3,237 55 1.7 _ ~ 87
District of Arizona 5,099 53 1.0 ~
53
District of New Jersey 1,537 52 3.4 ~ ~
83
Central District of California 3,433 49 1.4 [ ~
76
Northern District of California 1,769 45 2.5 - -J 74
All Federal districts
121,818
1,437
1.2 - - -_.. --
--
~ 75
0% 25% 50% 75% 100°k
Money Laundering Offenders, 1994-2001 3
(down 33% from 1994) and 364 for
record and reporting offenses in 2001
(down 37% from 1994).
Half the money laundering-related
referrals to U.S. attorneys in 2001
were from 10 judicial districts. The
U.S. attorney in the Southern District
of Florida received the most referrals
(106), followed by the Southern District
of New York (83), Puerto Rico (78),
and the Eastern District of New York
(71).
Federal agency referral of matters
evaluated for prosecution
Multiple Federal agencies are involved
in investigating money laundering viola-
tions and referring matters to U.S.
attorneys for prosecution." In fiscal
year 2001 U.S. attorneys evaluated
1,573 suspects for prosecution for
alleged money laundering violations,
representing 1.3% of the 118,977
Federal matters concluded by U.S.
attorneys in 2001. More than 30
Federal, State, and local agencies
provided referrals, with the majority
coming from agencies of the Depart-
ments of Treasury or Justice (table 1).
Referrals by agencies of Treasury
During 2001 the Treasury Department
referred 896 (57%) suspects to U.S.
attorneys in matters with money
laundering-related charges. Treasury
referred more than three-quarters of
monetary record and reporting
suspects.
From 1994 to 2001 the total of Treas-
ury referrals decreased 46% from
1,645. The largest part of the decrease
occurred in monetary record and
reporting violations (down 59% from
663 matters referred in 1994 to 274
in 2001).
Of all referring agencies, the U.S.
Customs Service (USCS) had the most
referrals for monetary record and
reporting offenses during 2001 (54%
"The provisions of the Homeland Security Act of
2002 (P.L. 107-296), transferred the Treasury
Department's Bureau of Alcohol, Tobacco and
Firearms to the Bureau of Alcohol, Tobacco,
Firearms and Explosives in the Department of
Justice. Treasury's Secret Service became a
part of the Department of Homeland Security.
Table 1. Matters concluded by U.S. attorneys with money laundering
as lead charge, by investigating agency, 2001
Refening Laundering! Monetary records
law enforcement racketeering and reporting
agencya Total Number Percent Number Percent
All agenaes 1,573 1,220 77.6% 353 22.4%
Department of Treasury 896 622 69.4% 274 30.69'°
U.S. Customs 376 184 48.9 192 51.1
Internal Revenue Service 444 368 82.9 76 17.1
All other Treasury° 76 70 92.1 6 7.9
Department of Justice 614 560 91.2°~ 54 8.8°k
Federal Bureau of Investigation 423 376 88.9 47 11.1
Drug Enforcement Administration 139 132 95.0 7 5.0
All other Justice` 52 52 100.0 0 -
Other° 63 38 60.3% 25 39.4°k
--Less than 0.5°~.
aReflects agency designations prior to the Homeland Security Act of 2002.
°Includes Alcohol, Tobacco and Firearms, Secret Service, and joint 5tate/local task forces.
`Includes Immigration and Naturalization Service, U.S. Marshals Service, and joint
State/local task forces.
°Includes U.S. Postal Service, Food and Drug Administration, Securities and Exchange
Commission.
Data source: Executive Office for U.S. Attomeys, central system file.
or 192). Money laundering matters
referred to U.S. attorneys comprised
4.2% of all matters referred by the
USCS (not shown in table). Charged in
part with enforcing money laundering
laws at U.S. borders, the USCS
accounted for the bulk of importing/
exporting monetary instrument viola-
tions (31 U.S.C. § 5316) referred for
prosecution in 2001. Of 178 matters
concluded in which importing/exporting
monetary instruments was charged, the
USCS had referred 96% (171).
The Financial investigations Division
of the USCS conducts undercover drug
money laundering operations. Since
the terrorist attacks of September 11,
2001, the division has coordinated
"Operation Green Quest" to "identify
and dismantle" the financial structure
used to fund terrorist activity (U. S.
Customs Service Annual Report,
Fiscal Year 2001).
The Internal Revenue Service (IRS)
referred 28% of suspects with a money
laundering-related charge in matters
concluded during 2001. IRS investiga-
tors deal with complex financial crimes
(including money laundering and tax
evasion and asset forfeiture). Money
laundering comprised 21 % of all
matters referred by the IRS in 2001
From 1994 to 2001 the number of Treasury referrals declined 59% for record/
reporting violations (Title 31) and 37% for laundering/racketeering violations
(Title 18)
Suspects referred for Suspects referred for
Title 31 offenses Title 18 offenses
soo 1,000
U.S. Department of Treasury
600 U.S. Department of Treasury 750
4001 500
U.3. Department of Justice
200 250
U.3. Dapartment of Justice
Oi
1994
0
1994 1996 1998 2000 2001
1996 1998 2000 2001
Note: The money laundering referral was the lead charge.
Source: Executive Office for U.S. Attomeys, central system file.
Figures 2 and 3
4 Federal Justice Statistics Program
^ The Money
Laundering
Suppression Act
(1994)
^ The Anti- ^ USA
Drug Abuse PATRIOT
Act (1988)
I Act (2001)
I
I
^ The Money I
^The Money
Laundering Laundering
Control Act and Financial
(1986) Crimes
Strategy Act
(1998)
The Bank Secrecy Act of 1970 (BSA)
gave Treasury authority to require
monetary record and reporting by financial
institutions. The intent was to prevent
criminals from using financial institutions
to conceal or launder money generated
from crime. (See 31 U.S.C. §§
5311-5332.) Initially used to deter tax
evasion and money laundering by organ-
ized crime, the BSA statutes are applied in
the investigation of an array of offenses
ranging from drug trafficking to financing
terrorist acts.
BSA regulations enable the detection of
criminal, tax, and regulatory violations by
providing a paper trail that follows the flow
of money. Financial institutions are
required to report transactions involving -
• currency of more than $10,000
(Currency Transaction Report)
• transportation of more than $10,000 in
currency into or out of the United States
(Currency or Other Monetary Instruments
Report)
• suspicious activity that may indicate a
law has been broken (Suspicious Activity
Report).
The Money Laundering Control Act of
1986 criminalized money laundering,
creating the first Federal money launder-
ing laws (18 U.S.C. §§ 1956, 1957). The
offenses included knowingly helping to
launder money from criminal activity,
knowingly engaging in a monetary trans-
action of more than $10,000 with property
derived from criminal activity, and structur-
ing transactions to avoid BSA reporting
requirements. The act also enumerated
SUA's.
The Anti-Drug Abuse Act of 1988
enhanced reporting requirements (stricter
identification and record keeping when
using cash to buy monetary instruments)
and expanded criminal and civil penalties
against money laundering. It also provided
the Treasury with authority to require
geographically targeted currency transac-
tion reports.
The Money Laundering Suppression
Act of 1994 created more stringent
requirements on the procedures used by
financial institution examiners and
expanded examiner training to improve
detection of laundering in financial
institutions.
The Money Laundering and Financial
Crimes Strategy Act of 1998 focused on
counter-money laundering support at the
State and local levels. The act created the
following:
• The National Money Laundering Report.
Treasury, together with Justice, set forth a
national plan for all levels of government
to coordinate anti-money laundering activi-
ties. The 2002 objectives included
enhancing law enforcement of money
laundering organizations and systems,
improving State and local law enforcement
efforts, and measuring the effectiveness
of anti-money laundering activities.
• Designation of areas at a high risk for
financial crimes/money laundering activity
(High Intensity Financial Crime Areas)
• Financial Crime-Free Communities
support programs that provide "seed
money' of up to $300,000 to State and
local programs to counter money
laundering.
The Strengthening America Act by
Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism
(USA PATRIOT) Act of 2001 toughened
accountability of U.S. banks in their
dealings with foreign correspondent
banks, strengthened laws responding to
the problem of terrorist financing and its
connection with money laundering, and
strengthened asset forfeiture laws in
matters involving funding of terrorist activi-
ties.
In addition, the USA PATRIOT Act created
a new money laundering statute: Bulk
cash smuggling (18 U.S.C. § 5332). The
new statute prohibits the concealment and
transfer of more than $10,000 across the
border with the intent to evade reporting
requirements. Convicted defendants are
subject to a greater sentence than a
reporting violation (that is, 18 U.S.C. §
5316) and all property involved in bulk
cash smuggling is subject to criminal
and/or civil forfeiture.
(not shown in table). The number of
suspects whom the IRS referred for
money laundering offenses decreased
59% from 1,077 in 1994 to 444 in
2001. Reduction in referrals was great-
erfor monetary record and reporting
violations (-83%) than for laundering/
racketeering offenses (-41 %).
The Secret Service investigates finan-
cialfraud schemes and currency
counterfeiting. During 2001 the Secret
Service referred 8 money laundering
matters, down from 19 in 2000. The
Bureau of Alcohol, Tobacco and violation peaked in 1995 with 725 refer-
Firearms referred 26 money laundering rats and decreased in 1998 (425)
matters to U.S. attorneys during 2001. before increasing to 650 during 2001.
Referrals by Justice agencies
During 2001 law enforcement agencies
of the Department of Justice referred
614 (39%) money laundering suspects
to U.S attorneys, the bulk of which
were for laundering/racketeering
offenses with specified unlawful activi-
ties (91 %). The number of Justice
referrals with alaundering/racketeering
The FBI was the source of the largest
number of Title 18 referrals (31 %). The
FBI has primary or dual jurisdiction
over most of the specified unlawful
activities listed under the money
laundering statutes. The FBI's Money
Laundering Unit uncovers money
laundering schemes which are a part
of drug trafficking, organized crime,
violent crime, and white collar crime.
Money Laundering Offenders, 1994-2001 5
Reporting of suspicious activity
From 1997 to 2001 the number of
Suspicious Activity Reports submitted
increased 206%. States with the highest
suspicious activity reporting rates per
100,000 persons in the general
population were New York, Nevada,
and California (derived from FinCEN,
SAR Activity Report, 2002).
The New York metropolitan area had
more than an estimated 14,000 Suspi-
cious Activity Reports filed in fiscal years
1998 and 1999, with a reported aggregate
amount of over $33 billion (National Drug
Intelligence Center, 2001). In the same
period, Los Angeles had the second
highest number, 5,171, with an aggre-
gated value of more than $7 billion.
Suspicious Activity Reports filed
for money laundering violations,
1997-2001
Number of SAR filings
120,000
Suspicious Activity Reports filed for
money laundering violations per 100,000
State residents, 2001
80,000
ao,ooo
o °"G-'-~
1997 1998 1999 2000 2001
April 1 March 31
Figure a Source: Financial Crimes Enforce-
ment, U.S. Department of the
Treasury, The SAR Activity Review, 3.
Of the 30,708 total matters referred by
the FBI for prosecution during 2001,
1.4% had money laundering as the
lead charge.
The Drug Enforcement Administration
(DEA) often works in conjunction with
other agencies in investigating money
laundering as it pertains to drug offend-
ing. During 2001 the DEA referred to
U.S. attorneys 139 matters with money
laundering as the lead charge. These
comprised about 1% of the 16,844
DEA referrals.
Referrals by other agencies
As a money service business, though a
non-banking institution, the U.S. Postal
Service (USPS) is required to comply
with the Bank Secrecy Act reporting
requirements. The USPS also investi-
gates the illicit use of postal financial
products to include money laundering.
The USPS referred 25 money launder-
ing matters to U.S. attorneys for prose-
cution (less than 1 % the 4,010 referrals
for all matters referred by the USPS).
Matters prosecuted
Of money laundering matters
concluded during 2001, 54% were
declined for further prosecution. Forty
percent of laundering/racketeering
matters were prosecuted in U.S. district
court, and 64% of monetary record and
reporting violations were prosecuted.
(Exporting/importing monetary instru-
ments had the highest prosecution rate
Table 2. Defendants charged in U.S. district court with a money laundering
offense, by most serious offense charged, 2001
Most serious offense charged Total Percent
Totals 1,477 100.0°~
Laundering/racketeering offenses (Title 18 offenses) 1,245 84.0%
Laundering of monetary instruments (18 U.S.C. § 1956) 1,100 74.5
Speafied unlawful activity (SUA) associated with money laundering
Violent 24 1.6
Property 693 47.1
Drug 175 11.8
Public-order 75 5.1
Unknown/not reported° 133 8.9
Engaging in transactions using property derived
from specified unlawful activities (18 U.S.C. § 1957) 140 9.5
Speafied unlawful activity (SUA) assocated with money laundering
Violent 42 2.8
Property 39 2.6
Drug 2 -
Public-order 40 2.7
Unknown/not reported° 17 1.2
Illegal money changing business (18 U.S.C. § 1960) 5 --
Monetary record and reporting offenses
(Title 31, Bank Secrecy Act offences) 232 16.0%
Exporting/importing monetary instruments (31 U.S.C. § 5316) 135 9.1
Structuring monetary transactions (31 U.S.C. § 5324) 94 6.4
Failure to file Currency Transaction Report (CTR) (31 U.S.C. § 5313) 3 --
-Less than 0.5%.
'630 defendants were charged with a money laundering-related offense as a secondary offense.
°Not reported on indictment because cases were sting cases in which SU A did not ap ply or infor-
mation was not recorded during court processing.
Source: Administrative Office of the U.S. Courts, criminal master file, fiscal year.
of the component offenses that
comprise money laundering: 87%.)
From 1994 to 2001 the prosecution
rate for monetary record and reporting
offenses increased from 38% to 64%
while the prosecution rate for
laundering/racketeering declined
slightly (from 46% in 1994 to 40% in
2001).
• Of the 855 declinations for prosecu-
tion, 13% were prosecuted by other
6 Federal Justice Statistics Program
SAR Oling rate per 700,000 popuWtlon
~; t8a0 . > W
From 1994 to 2001 the percentage
prosecuted of those suspected
of monetary record and reporting
offenses (as lead charge) increased
from 38% to 64%. Prosecutions for
laundering/racketeering declined from
46% to 40% of suspects considered.
Percent of matters prosecuted
1 oo°r°
75% Monetary record and reporting
50%
Laundering/racketeering
25%
o°i° _ _ _ _
lssa lsss 1ss8
fn 1994, 77% of defendants
adjudicated for monetary record and
reporting were convicted; in 2001,
92% were convicted. The percent of
laundering/racketeering defendants
convicted rose from 81% to 87%.
Percent of cases convicted
100% I Monetary record and reporting
75%~.~ Laundering/racketeering
50%
25%
- o%' - __ --__ _
2000 2001 1994 1998 1998 2000 2001
Matters concluded in fiscal year.
Source: Executive Office for U.S. Attorneys,
central system file.
Cases terminated in fiscal year.
Source: Administrative Office of the U.S.
Courts, criminal master file, fiscal year.
Figur°s 5 and 6
authorities or prosecuted on other
charges (not shown in table).
• 23% of matters were declined for lack
of criminal intent, 19% due to insuffi-
cient or weak evidence, and 17% at the
request of the referring agency (not
shown in table).
Cases filed in U.S. district court
During 2001, 1,477 defendants were
charged with money laundering.
Laundering/racketeering offenses
comprised 84% (laundering of
monetary instruments, 74.5% and
engaging in monetary transactions
using property derived from specified
unlawful activity, 9.5°10), and monetary
record and reporting 16% of cases
(exporting/importing monetary instru-
ments, 9%, structuring financial trans-
actions, 6%) (table 2).
The principal money laundering
statutes (18 U.S.C. § 1956 and 1957)
apply in cases where transactions
involved proceeds from a broad range
of specified unlawful activities. During
2001, 1,100 defendants were charged
with laundering of monetary
instruments.
Of these defendants, 63% were also
charged with a property offense (for
example, bank fraud, embezzlement,
and counterfeiting); 16%, with a drug
offense (for example, importing/export-
ing controlled substance and selling or
distributing marijuana). Public-order
offenses (for example, racketeering,
bribery, and extortion) comprised 7%
and violent offenses (includes kidnap-
ing and bank robbery) 2% of cases in
which money laundering was the most
serious offense filed. Specified unlaw-
ful activities information was not
indicated in 12% of cases.
Of the 140 defendants charged with
engaging in monetary transactions
using property derived from specified
unlawful activity, the most common
SUA's included bank robbery and
kidnaping (30%) followed by public-
order (29%) and property offenses
(28%).
Adjudication of money laundering
defendants in U.S. district court
About 88% of 1,420 adjudicated defen-
dants were convicted. Of the 1,243
convicted defendants, 91 % had
pleaded guilty, and 9% were found
guilty at trial (table 3).
Of the 177 cases that did not result
in a conviction, most (82%) were
dismissed. Ninety-four percent of
defendants adjudicated for
exporting/importing monetary instru-
ments were convicted, and of those
convicted, 98% had pleaded guilty.
Monetary reporting and recording
offenses had a slightly higher convic-
tion rate (92%) compared to
laundering/racketeering offenses
(87%).
Table 3. Disposition of cases adjudicated in U.S. district court, by money laundering as most serious offense, 2001
Number of defendants in criminal cases terminating during 2001 who were -
Percent Convicted Not convicted
Most serious offense filed Totat convicted Total Guilty plea Trial Total Dismissed Trial
Total 1,420 87.5% 1,243 1,130 113 177 145 32
Laundering/racketeering 1,179 86.6 1,021 912 109 158 129 29
Laundering of monetary instrument 1,043 85.8 895 799 96 148 119 29
Engaging in transactions 130 92.3 120 107 13 10 10 0
Prohibition of money exchange 6 100.0 6 6 0 0 0 0
Monetary record and reporting 241 92.1 222 218 4 19 16 3
Exporting>importing monetary instruments 140 93.6 131 129 2 9 8 1
Structuring transactions 96 90.6 87 85 2 9 7 2
Failure to report currency transaction 5 80.0 4 4 0 1 1 0
Source: Administrative Office of the U. S. Courts, criminal master file, fiscal year.
Money Laundering Offenders, 1994-2001 7
Money laundering as a secondary
offense
In addition to the 1,477 defendants
charged with money laundering as the
primary charge during 2001, money
laundering was a secondary offense in
630 cases. Of these 630 cases, the most
serious offense charged was drug-related
(90%), followed by property (6%), public-
order (4%), and violent offenses (1%).
Between 1994 and 2001 the number of
defendants with any money laundering-
related charges filed in U. S. district court
reached a peak in 1998 at 2,712 cases
(an increase of 42.5% from 1994),
followed by a decrease to 2,107 cases in
2001 (but an overall increase of 10.7% in
number of cases from 1994). The number
of defendants with money laundering as a
secondary charge increased 11 %, and the
number of defendants with money
laundering as the most serious offense
increased 10%.
Ninety-two percent of the 623 defendants
adjudicated for money laundering as a
secondary offense during 2001 were
convicted. Of those convicted, 6% of
convictions were obtained via trial verdicts.
Drug trafficking had the highest rate of
conviction (92%).
About 90% of defendants
convicted of money laundering
as a secondary offense received
a prison sentence. Rates of
imprisonment varied across the
types of offenses (drug offenses,
90%; property offenses, 73%;
and public-order offenses, 72%).
Defendants with a drug offense
as the most serious offense
received prison terms with an
average 97 months, compared
to 44 months for property offend-
ers. Prison terms for public-order
offenses (including racketeering/
extortion) had an average
of 70 months.
Between 1994 and 2001 defendants charged
with money laundering as either a primary or
secondary offense were most often charged
with money laundering as their primary offense
Number of defendants with money
laundering as primary or secondary offense
3,0001
Violen
2,500 public-orde
Property
2,000
1,500
M~
1,000
500
Drug tratflcking
and
Laundering/racketeering
o'
1994 1997 2000 2001
Figure 7
Most serious offense of defendants adjudicated and sentenced with
money laundering as a secondary offense, 2001
Number of persons Mean imposed
sentenced to - prison
Most serious Total Percent Any Probation sentence
offense filed adjudicated convicted prison only Other (in months)
Total 623 91.7% 512 41 18 93.5
Violent 4 100.0 4 0 0 --
Property 34 88.3 25 5 0 43.8
Drug 560 92.1 465 33 18 97.3
Public-order 25 84.0 18 3 0 69.5
__
ote: Detail exGudes observations missing a particular characteristic.
--Not calculated, too few cases.
Source: Administrative Office of the U.S. Courts criminal master file, fiscal year
Case processing time
During 2001, the average processing
time from filing to disposition was 17
months for money laundering defen-
dants. Of money laundering cases
adjudicated, trials took an average of
The average prison term for a Federal
money laundering offense increased
from 44 months in 1994 to 48 months
in 2001
Average number of months
of prison imposed
so
Laundering/racketeering
40
20
Monetary record and reporting
o - --
1994 1996 1998 2000 2001
Figure 8
22 months (from case filing to disposi-
tion), compared to an average of 15
months for cases which were the result
of a guilty plea (of the 1,420 criminal
cases terminating in U.S. district courts
in 2001). Laundering/racketeering
offenses were processed on average
within 18 months, 7 months longer than
monetary records and report violations.
Characteristics of defendants
convicted of money laundering
Defendants sentenced for money
laundering as the most serious filing
offense were primarily male (80%),
U.S. citizens (77%), over age 35
(70%), and white (52%) (table 4). One
in three defendants convicted of money
laundering had a prior adult conviction.
Defendants with a monetary record and
reporting filing offense were less apt to
be U.S. citizens (52%) and compara-
tively less likely to have a prior criminal
history (21%) than laundering/racket-
eering defendants. A greater share of
defendants with a monetary record and
reporting offense were female (29%)
and Hispanic (48%) than defendants
convicted of laundering/racketeering
offenses.
During 2001, 80% of monetary
record and reporting offenses
and about 50% of laundering/
racketeering offenses were
disposed of in 1 year or less
Percent of cases disposed
100%
7s°io
Laundering/
racketeering
so°i°
25%
Monetary record
and reporttng
o°i° -- -
0 12 24 36 48 60
Months from filing to disposition
Source: Administrative Office of the U.S.
Courts, criminal master file, fiscal year.
Figure 9
8 Federal Justice Statistics Program
Table 4. Characteristics of convicted money laundering defendants, 2001
Laundering/racketeering Monetary record and reporting
Defendant To tal (Title 18 offenses) (Title 31 offenses)
characteristics Number Percent Number Percent Number Percent
Total 1,243 100.0°~ 1,021 100.0% 222 100.0°~
Gender
Male 912 80.0% 766 82.0% 146 70.9°k
Female 228 20.0 168 18.0 60 29.1
Race/ethnicity
White non-Hispanic 593 52.3% 521 56.1% 72 35.1%
Black non-Hispanic 186 16.4 162 17.5 24 11.7
Hispanic 292 25.8 193 20.8 99 48.3
Other 62 5.5 52 5.6 10 4.9
Age
18-24 yr 55 4.9% 31 3.4% 24 11.8%
25-34 yr 286 25.3 231 25.0 55 27.0
35-44 yr 350 31.0 286 30.9 64 31.4
45-59 yr 335 29.7 289 31.2 46 22.6
60 or older 103 9.1 88 9.5 15 7.4
Citizenship
U.S. citizen 867 76.6°~ 761 81.9°~ 106 52.2%
Non-U.S. rtitizen 265 23.4 168 18.1 97 47.8
Prior criminal history*
No convictions 759 66.6% 596 63.8°~ 163 79.1 °~
Prior adult convictions 381 33.4 338 36.2 43 20.9
- ----
ote: tai excludes defendants for whom a particular characteristic was not reported.
"A criminal record is limited to prior adult convictions. For some defendants in this table, it is further limited
to the portion that is relevant for calculating sentences under the Federal sentencing guidelines.
Source: Administrative Office of the U.S. Courts, criminal master file was merged with Pretrial Services Agency (PSA) and
U.S. Sentencing Commission (USSC) data files. These latter two files contain information on characteristics of defendants.
Sentencing outcomes
During 2001, of the 1,243 defendants
convicted for money laundering, 72%
received a sentence to a prison term,
and 24% received probation only (table
5). Defendants convicted of laundering/
racketeering (79%) were more likely
than defendants convicted of monetary
record and reporting violations (40%)
to receive a term of imprisonment.
Eighty percent of defendants convicted
of laundering of monetary instruments
or of engaging in transactions from
unlawful activity received a sentence to
prison. Imprisonment was less likely
for defendants convicted of exporting/
importing monetary instruments (41 %)
and structuring illegal financial transac-
tions (38%).
The average prison sentence imposed
for defendants convicted of money
laundering was 48 months. The 712
defendants that received a prison
sentence for laundering of monetary
instruments received a longer prison
term, on average, than for other money
laundering offenses (53 months). More
than half of defendants convicted of
structuring financial transactions
received probation only as a sentence.
Probation terms imposed were great-
est, on average, for laundering of
monetary instruments (44 months) and
least, for structuring financial transac-
tions (31 months). A total of 256 defen-
dants with money laundering as the
most serious offense of conviction
received an average fine of $40,808.
The median fine amount was $2,750.
Table 5. Type of sentence imposed following a conviction for a money laundering offense, 2001
Imposed prison Probation
Percent sentence (in months) (in months)
Any Probation
Most serious offense filed Total orison only Other Mean Median Mean Median
otal
Fine
Mean
edian
Total 1,243 72.0 23.7 4.3 48.4 36.0 38.5 36.0 256 $40,808 $2,750
Laundering/racketeering 1,021 79.0 18.0 2.9 51.9 37.0 42.6 36.0 190 53,109 3,000
Laundering of monetary instruments 895 79.6 17.3 3.1 53.2 50.8 43.6 36.0 157 58,386 3,000
Engaging in transactions 120 79.2 19.2 1.7 41.6 33.0 40.1 36.0 27 33,916 4,000
Prohibition of money exchange 6 0.0 100.0 0.0 - -- 24.0 -- 6 1,417 --
Monetary record and reporting 222 39.6 49.5 10.8 17.0 12.0 31.8 36.0 66 5,397 2,000
Exportingfimporting 131 40.5 46.6 13.0 19.6 47.5 32.6 36.0 25 2,694 2,000
Structuring transactions 87 37.9 54.0 8.0 13.4 10.0 30.9 36.0 41 7,044 2,500
Failure to report currency transaction 4 50.0 50.0 0.0 8.5 -- 30 0 -- 0 -- --
Note: Detail excudes observations for which a particular characteristic was not reported. _
-Not calculated, too few cases.
Source: Administrative Office of the U.S. Courts, criminal master file, fiscal year.
Money Laundering Offenders, 1994-2001 9
State activities against money involving the proceeds of a statutorily Commercial defendants and
laundering defined unlawful activity. money laundering
In 1985 Arizona became the first State
to adopt legislation against money
laundering. Since then, 35 other States
have adopted similar legislation.
States follow four models to some degree:
• the Federal statute (31 USC §§ 1956-
1957) (used notably by New York)
• the President's Commission on Model
State Drug Laws (1993), including money
laundering, money transmitting, asset
foreiture, and related provisions
• the Money Transmitter Regulators
Association, a State regulator group and
publisher of a model statute
• the National Conference of Commission-
ers on Uniform State Laws, model
statutes.
State legislation varies widely, covering a
spectrum from specified unlawful
activities, such as racketeering or corrupt
activities and crime for profit, to any
felony. The basis of culpability across
States with statutes is a transaction
Transactions involving criminal proceeds
with the intent to conceal the source of the
proceeds are frequently coupled with the
requirement that the actor know that the
proceeds were derived from specified
unlawful activity. In some States the trans-
action has to have taken place in a bank;
in others, any transaction qualifies.
Transportation is included in some State
statutes to criminalize the movement of
proceeds without an intervening transac-
tion.
Following the enactment of the USA
PATRIOT Act, 10 States (Arizona, Califor-
nia, F-orida, Illinois, Indiana, Maryland,
Michigan, Missouri, New Jersey, and New
York) adopted new or amended legislation
to regulate the money transmitter industry.
In fiscal years 2000 and 2001, 17 sites
were awarded Financial Crime-Free
Community grants from a total of $2.9
million allocated. This money is used to
enhance intrastate efforts against money
laundering - to include developing
capabilities to detect and prosecute
money laundering.
Businesses comprised less than 2% of
all money laundering-related defendants
adjudicated during 2001. The 22
businesses charged with money
laundering as the most serious offense
included auto dealerships, grocery
stores, banks, furniture stores, restau-
rants, physicians' offices, construction
firms, beauty shops, and research firms.
36 States have adopted money laundering legislation since 1985
~ ~~ -_
r °-
~7
~~
Defendants convicted of money
laundering are also subject to criminal
forfeiture (18 U.S.C. § 982). During
2001, 85 defendants convicted of a
money laundering offense were also
charged under the criminal forfeiture
statute. All property may be forfeitable,
even legitimate funds that were
commingled with illicit assets.
All property associated with the money
laundering offense is also subject to
civil forfeiture. Civil (and criminal)
forfeiture penalties can be assessed
for monetary record and reporting
violations (for conduct violating 31
U.S.C. §§ 5313, 5316, or 5324)12 and in
violation of laundering/racketeering
statutes (18 U.S.C. §§ 1956, 1957, or
1960).13
Defendants sentenced under the
U.S. Sentencing Commission's
Money Laundering Guidelines
During 2001, 951 defendants were
sentenced for money laundering under
1231 U.S.C. § 5317
1318 U.S.C. § 981(a)(1)(A)
Of the 22 charged, 15 were convicted
(68.2%); 13 received probation (with an
average term of 38.8 months), and 8
were fined (an average of $68,454).
Individuals comprised at least 98%
of defendants charged with money
laundering offenses, 1994-2001
Number of defendants
1,soo
1,200
soo
Individuals
400
0
1994 1997 2000
Money laundering was the most serious
offense filed.
Source: Administrative Office of the U.S.
Courts, criminal master file.
Figu2 10
the three money laundering sentencing
guidelines."
Sixty-five percent of defendants were
sentenced for laundering of monetary
instruments. Thirteen percent were
sentenced for engaging in monetary
transactions using property derived
from unlawful activities, and 22% were
sentenced for exportinglimporting
monetary instruments, structuring
transactions to evade reporting require-
ments, or failing to file a currency trans-
action report.
"The primary guideline at sentenang is used
for reporting money laundering defendants
sentenced. The Sentencing Guidelines were
amended on November 1, 2001, effectively
consolidating sections 2S1.1 (laundering of
monetary instruments) and 2S1.2 (engaging in
monetary transactions in property derived from
unlawful activity) and more closely tying money
laundering violations to the underlying offense.
10 Federal Justice Statistics Program
~ O Adopted money laundering statutes
~~
Table 6. Sentencing adjustment for
money laundering defendants
sentenced in 2001, by role in offense
Sentenced
Role in offense Number Percen
Total' 951 100°~
No adjustment 794 83.6
Manager, organizer
supervisor or leader 51 5.4
Manager of 5 or more
particpants 36 3.8
Leader or organizer of 5
or more oarticioants a4 ~
Note: In 2001, 951 defendants were sentenced
with money laundering as the primary sentenc-
ing guideline. Detail exdudes observations
where a particular characteristic was not
reported.
Source: U.S. Sentencing Commission,
FY 2001 datafile.
The guidelines permit a longer
sentence if a defendant organized,
managed, or led the money laundering.
Of defendants sentenced under the
money laundering guidelines, 84%
received no upward adjustment; 5%
received a sentence adjustment for
playing a role as manager, organizer,
supervisor or leader; 4%, an adjust-
ment for managing five or more partici-
pants (not specifically organizing or
leading); and 7°1°, an adjustment for
leading or organizing five or more
people (table 6).
Of the 951 defendants sentenced
under the money laundering guidelines,
51% were convicted for laundering less
than $200,000, 44% were convicted of
laundering between $200,000 and $10
million, and 4% had laundered more
than $10 million (not shown in table).
Methodology
The source of the data used jn this
report is the BJS Federal Justice
Statistics Program (FJSP) database.
The FJSP compiles comprehensive
information on individuals and corpora-
tions processed through the Federal
justice system from source files
provided by the Executive Office of
United States Attorneys (EOUSA), the
Administrative Office of the United
States Courts (AOUSC), the U.S.
Marshals Service (USMS), the Drug
Enforcement Administration (DEA), the
United States Sentencing Commission
(USSC), and the Federal Bureau of
Prisons (BOP).
In this report, money laundering offend-
ers were defined according to selected
Federal criminal statutes. (See page
2.) For suspects in matters referred
and concluded, the "lead charge" was
used to describe money laundering
suspects. This pool includes criminal
referrals for which the assistant U.S.
attorneys indicated a money laundering
statute as the "lead charge" or primary
basis for investigation and for which at
least 1 hour of investigation time was
spent.
The AOUSC provided U.S. district
court data on money laundering defen-
dants in criminal cases filed, adjudi-
cated, and sentenced. The "most
serious offense is the filing offense
with the statutory maximum penalty.
Money laundering violations from all
offenses filed for a particular defendant
were also reported. Specified Unlawful
Activities (SUA's) were aggregated to
BJS offense categories as shown in
Appendix table 1 and reported in table
2.
Data from the USSC showing defen-
dants with money laundering as the
primary sentencing guideline overlaps
with, but does not represent the same
pool of defendants described in the AO
data. Both datasets include defendants
for whom the offense of money
laundering resulted in the longest
sentence though differences arise as
defendants could be sentenced under
more than one guideline. Checks were
made on the two data series for 2001,
and money laundering defendants
were found to share a comparable
profile.
The Bureau of Justice Statistics is
the statistical agency of the U.S.
Department of Justice. Lawrence A.
Greenfeld is director.
Mark Motivans, BJS Statistician,
wrote this report under the supervi-
sion of Steven K. Smith. The follow-
ing individuals reviewed this report
and provided substantive comments:
Stefan Cassella, Alice Dery, John
Hyland, and Les Joseph of the Asset
Forfeiture and Money Laundering
Section of the Department of
Justice; Juiie Samuels and Clara
Dunn of the Department of Justice
Criminal Division; Lou Reedt, Court-
ney Semisch, and Paula Desio of the
U.S. Sentencing Commission; and,
Pragati Patrick and Marika Litras of
the Administrative Office of the U.S.
Courts. William Adams, Avi Bhati,
Barbara Parthasarathy, and Juliet
Scarpa of the Urban Institute verified
this report. Thomas Judd, BJA
consultant, and Carol Ferguson, of
the Office of the Arizona Attorney
General compiled the information on
state money laundering statutes.
Carolyn Williams and Tom Hester
edited the report.
July 2003, NCJ 199574
Appendix table 1. Detail of BJS offense categories used to group specified unlawful activities in table 2
Violent offenses
offenses
Kidnaping Embezzlement of public money
Bank fraud
Bankruptcy fraud
Postal-interstate wire-radio fraud
Counterfeiting
Transportation of stolen property
Larceny and theft-bank
Other interstate commerce
offenses
Marijuana-sell/distribute/dispense
Controlled substance-import/export
Controlled substance-manufacture
Controlled substance-sell/distribute/dispense
Nartbtics-import/export
Narcotics-substance-sellldistrtbute/dispense
Public-order offenses
Extortion-racketeering threats
Racketeering-robbery
Intimidation of witnesses
Obscene material
Other Federal statutes
Gambling-lottery-transmit wager
Trading with the enemy
Custom laws
Bribery
Money Laundering Offenders, 1994-2001 11
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Survey of State and Federal inmates
Of the more than 55,000 drug offenders in
Federal prison during 1997, 4% indicated
they had been laundering drug money at
the time of arrest, compared to 3% of the
217,000 drug offenders in State prison.
Of State and Federal inmates serving time
for a drug offense, about half (144,364)
indicated that at the time of their arrest
they were either selling to users or distrib-
uting drugs to dealers.
About 11% of State and Federal inmates
who reported having sold drugs at the time
of arrest indicated that they had been
involved in running drug money. (Thirteen
percent of drug traffickers in Federal
prisons and 11% of State traffickers
reported having engaged in running drug
money.)
Estimated percentage of drug offenders in State and Federal prisons
reporting to have laundered and/or transported drug money
C~ues6ons posed to a 1997 sample of State and Federal inmates serving a drug sentence•
At the time of your arrest were you laundering drug money?"
Laundered drug money
Drug offenders Total Percent
All inmates 272,770 3.2°k
Federal inmates 55,742 4.4
State inmates
217,028
2.9
(Of inmates arrested for distributing drugs to users and/or dealers)
At the time of your arrest were you a money runner?"
Transported drug money
Drug traffickers Total Percent
All mmates 144,364 11.2%
Federal inmates
28,142
13.4
State inmates 116,222 10.7
Source: Bureau of Justice Statistics, Survey of Inmates in State and Federal
Correctional Facilities, 1997.