Proposals to Reform the Federal Money Laundering Statutes
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unlawful activity (e.g., spending a fraudulently obtained tax refund) trigger disproportionately harsh
penalties far in excess of those prescribed for the underlying offense.
Some courts have adopted a limitation worthy of codification. The Tenth Circuit, in United
States v. Garcia-Emanuel, held that “ [i]f transactions are engaged in for present personal benefit, and
not to create the appearance of legitimate wealth, they do not violate the money laundering statute. ” 17
According to the Tenth Circuit, “ the requirement that the transaction be ‘ designed ’ to conceal requires
more than a trivial motivation to conceal, ” and must be “ based on substantial evidence, not mere
suspicion. ”
The Second, Sixth, and Eleventh Circuits have endorsed the reasoning in Garcia-Emanuel,
holding that to convict under the concealment prong of § 1956, the government must establish that
the transaction was engaged in to create the appearance of legitimate wealth, not for present personal
benefit. 18
17
14 F.3d 1469, 1474 (10th Cir. 1994).
18 United States v. Stephenson, 183 F.3d 110 (2d Cir. 1999); United States v. Marshall, 248 F.3d 525 (6 th Cir. 2001); United States v. Majors, 196 F.3d 1206 (11 th Cir. 1999).
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