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As a defense attorney you likely know what I am about to state on this page. You should use everything and every person at your disposal to defend your client. The Government will use everything at its disposal to convict them. While a special agent with IRS, Criminal Investigation for twenty-eight years and having been qualified as a money laundering expert for the U.S. Government, my testimony was instrumental in convicting the defendant each time. Since retirement I have consulted as a money laundering expert with many individuals and corporations on numerous occasions. In addition, there were many times during my career and after retirement when I was requested to testify as an expert, but the defendant pled guilty prior to the trial beginning.
There are instances you may feel that you have no other option but to plea your client, based upon the evidence the Government says they have. However, the Government does not always have as strong a case as they purport to have. On numerous occasions, I’ve advised AUSAs and case agents that, in my expert opinion, they did not have sufficient evidence to likely secure a conviction for a money laundering violation. Trust me on this, many case agents seriously lack knowledge of the elements necessary to prove a money laundering charge and the grand jury knows far less. Many AUSA have a good knowledge of the money laundering statutes, but there are some who do not. If the government tells the grand jury that a money laundering violation has taken place, they will believe it, because the statutes are so complex. It has been said on many occasions that one could indict a “ham sandwich” since the prosecution totally controls the grand jury and the evidence presented to them. Securing an indictment is easy, but securing a conviction is a totally different ballgame and sometimes almost impossible in a money laundering case because people don’t understand it. Many times the AUSA secures an indictment and then hopes he can convince the target of the investigation to plead guilty, because of the lengthy prison sentence that comes with a money laundering conviction. If they can’t get the plea, they may not go forward with the trial.
In a money laundering trial, the prosecutor wants to keep it very simple for the jury, so they can understand it (or understand it as much as possible). But if you are the defense attorney, you want to make it sound as complex as you possibly can. Because if the jury can’t understand it, chances are less likely that they will find them guilty.
Example: The Government indicted and was prosecuting a defendant for depositing illegal funds to a bank account by showing the $30,000 cash deposit was from a drug deal a few days earlier. However, the Government had no evidence that the $30k deposit came from the drug deal. Now, was it the same $30k? Most likely, but no one had evidence to prove it. Proving that $30k was deposited was easy, but they had to show the $30k was illegal funds, because the money being illegal at the time of the deposit is the key element of the money laundering charge. Just saying that it was is not good enough. I was brought in to review the evidence and render an expert opinion as to whether or not the Government had enough evidence to secure a conviction at trial. He had already been indicted on this same evidence, but as they say, “one could indict a ham sandwich”, so an indictment means nothing. After my review, I asked if they had any evidence to show that the $30k came from the drug deal? I was told that it was obvious. I said, “obvious is not good enough,” you don’t have any more than that? The AUSA said “no” and did not think he needed it and a jury would see that there was no other source for it to come from. So I said, “oh really, well what do you do if the defense puts a relative on the stand who says that they had cash in their safe at home that they gave it to the defendant for a business deal he had presented to them.” That’s reasonable doubt and enough to get him acquitted. I Informed the AUSA and the case agent that I felt the Government lacked the necessary evidence to show that the $30k was from the drug deal and not from some other source. There was no evidence, testimony or paper trail leading from the drug deal to the deposited funds. They both agreed with me and saw that they would not likely get a conviction. So the Government had a meeting with the defendant and his attorney and convinced both of them that there was enough evidence to show where the $30k came from and enough to convict. The defendant accepted a plea offer on the drug charge and the Government dropped the money laundering charge. That mistake cost him 40 years in prison. I have witnessed this same scenario, early on as a case agent and since retirement, as a consultant for the defense. Although the evidence is very weak and sometimes non-existent, the heavy hammer of the money laundering statute and the United States Attorney’s Office can be very persuasive.
If a money laundering expert is available, consult with him/her. At the very least, have them review the evidence, indictment, and/or any other material you may have available, to insure that the information or evidence is accurate. Too often, federal prosecutors are unfamiliar with the correct application of the money laundering statutes. There are numerous statutes and in some instances, the defendant is charged with the incorrect statute. A real example: a defendant is part of a money laundering undercover case and is arrested. Now in an undercover case the money is government money, but it doesn’t matter, it’s considered illegal funds if the undercover agent said they were. And this case should be charged under the money laundering “Sting Provision” because the way the statute reads, the money is not required to be from an illegal source as long as the government tells the defendant that the funds are from an illegal source (one of the many SUAs – specified unlawful activities). But the AUSA decides to charge a different money laundering statute (not the “Sting Provision”), which is fine. The Government can charge any statute they want, but they are required to prove the elements of the violation. However, in an undercover case, the Government can’t possibly prove the elements of a regular money laundering statute, because the first and most important element that must be proven is that there was “actual illegal proceeds” (not government money), which in an undercover case the Government does not have. The real problem comes in when the Judge does not understand the statutes either or may not care. And to make matters worse, the judge gives instructions to the jury that states that the money must be from one of the SUAs (an illegal source). Not only was the money not from an illegal source, there was never any money produced by the undercover agents. The defense attorney did not catch any of this during trial and the defendant was not given a new trial and went to prison for 5 years. If the judge or the defense attorney had simply read and understood the jury instructions, the case would never have even gone to the jury. A directed verdict of acquittal should have been issued.
The attorneys and prosecutors who possess the greatest knowledge regarding money laundering statutes are those working for the IRS or Department of Justice, Money Laundering Section in Washington, D.C.
While employed as a special agent for IRS, Criminal Investigation and as a money laundering expert, I often received calls from prosecutors and special agents (with numerous agencies) throughout the United States, asking questions in connection with criminal cases. If for some reason I was unsure of the answer, there were numerous other experts throughout the country who I trusted and could bounce my answer off of. Money laundering is a very complex matter and it is extremely difficult for many agents to grasp an understanding of what is or is not a violation of those statutes. It took 13 before I felt comfortable enough to become qualified as an expert in federal court in the mid-90’s.
Should you require assistance with either a civil or criminal tax or money laundering case, please contact me. If you require expertise in another field, I can likely guide you in the right direction or may have a person on my staff who can assist.