Proposals to Reform the Federal Money Laundering Statutes
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If § 1957 is not simply eliminated, Congress should at least codify that Justice Department
policy so that § 1957 can only be used to prosecute the “ money launderer ” and not the criminal who
is the source of the money. This would prevent the misuse of the statute to go after the criminal who
generates the proceeds and who is already subject to penalties for the commission of the underlying
crime. Congress should also require that the proscribed “ monetary transaction ” be part of a suitably
defined “ pattern ” of similar transactions adding up to a high dollar threshold in order to incur felony
liability. 23 If it is not part of a pattern or does not exceed some high dollar threshold, the merchant
should, at most, face a misdemeanor penalty. There may be some social utility (albeit minimal) in
prosecuting merchants such as car dealers who regularly cater to the drug trade. 24 But there is no
social utility in making a felon out of a merchant who engages in one such transaction.
Congress could also make § 1957 more rational and less of a blunderbuss if it raised the
dollar threshold from $10,000 to $25,000.
23 See, e.g., 31 U.S.C. § 5322(b) (pattern of illegal activity involving more than $100,000 in a 12-month period); 31 U.S.C. § 5321(a)(6)(B) (pattern of negligent violations by a financial institution).
24 Remember, if the merchant does anything to help conceal the source of the money or the ownership of the vehicle he can be prosecuted under § 1956.
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