Money Laundering

Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. The overall scheme of this process returns the "clean" money to the launderer in an obscure and indirect way.

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Money Laundering

New York Money Laundering Laws: The Basics

For the purposes of New York’s money laundering statute, criminal conduct is defined as any act in violation of New York state laws. A crime in violation of another state’s laws or federal laws can also qualify as an unlawful source of proceeds in a money laundering prosecution as long as the prohibited act is also unlawful in New York.

Statute New York Penal Law Article 470, et seq.
Statutory Definition of Money Laundering (Abbreviated) A person is guilty of money laundering when, knowing that the property involved in one or more financial transactions represents the proceeds of criminal conduct, he or she conducts one or more such financial transactions which in fact involve the proceeds of specified criminal conduct with intent to:

  • Promote the carrying on of criminal conduct or engage in conduct constituting a felony (under tax law); or
  • Knowing that the transaction or transactions in whole or in part are designed to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of criminal conduct; or avoid any transaction reporting requirement imposed by law

New York’s money laundering statute is quite complex; see the statute for additional scenarios prohibited under the law.

“Financial Transactions” in the Context of Money Laundering Any deposits, wire transfers, payments, sales, purchases, loans, extensions of credit, transfers of title, and currency exchanges. Any other acts made through or by a financial institution such as a bank, broker, credit union, loan company, travel agency, or another type of business may also qualify as transactions for the purpose of money laundering.
Defenses to Money Laundering Charges
  • Lack of knowledge regarding the source or nature of the money and other proceeds gained through criminal conduct
  • Lack of intent to support or carry out criminal conduct
  • Lack of intent to conceal, disguise, or hide the source or nature of money and other proceeds gained through criminal conduct
  • Entrapment arranged by police or law enforcement officials
Penalties and Sentences
  • 4th Degree Money Laundering (more than $5,000): Class E felony; up to 4 yrs. in prison
  • 3rd Degree Money Laundering (more than $50,000): Class D felony; up to 7 yrs. in prison
  • 2nd Degree Money Laundering (more than $100,000): Class C felony; up to 15 yrs. in prison
  • 1st Degree Money Laundering (more than $1 million): Class B felony; up to 25 yrs. in prison

Fines of up to twice the value of the monetary transactions made to engage in money laundering may be imposed.

Note: State laws are constantly changing

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