Proposals to Reform the Federal Money Laundering Statutes
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Proposal #2: Define and narrow the term “ to conceal or disguise the nature, the location, the source,
the ownership, or the control of the proceeds of specified unlawful activity. ”
In contrast to promotion, the concealment prong of 18 U.S.C. § 1956 encompasses the
conduct commonly understood to constitute money laundering. It proscribes the conducting of a
transaction “ knowing that the transaction is designed in whole or in part-(i) to conceal or disguise the
nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful
activity. ” Unfortunately, some courts have broadly interpreted the term “ to conceal or disguise ” to
include virtually all transactions which involve the proceeds of unlawful activity.
Contrary to Congressional intent, this “ turn[s] the money laundering statute into a ‘ money
spending statute. ’” 16 Spending money from a specified unlawful activity is already punished by
another money laundering statute, § 1957 — but only if the money exceeds $10,000. And even
when this monetary threshold is satisfied, § 1957 caps the penalty at ten years ’ imprisonment,
compared to the twenty-year maximum sentence authorized for concealment money laundering.
Clearly, Congress intended more deliberate concealment efforts to trigger the higher maximum
sentence. By the same token, Congress did not intend that conduct incidental to the underlying
16 United States v. Sanders, 928 F.2d 940, 946 (10 th Cir. 1991) (quoting portions of the statute ’ s legislative history that suggest that Congress did not intend to criminalize every transaction involving illegally obtained money).
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