Money Laundering-New York

Twenty-seven owners and employees of wire transfer stores in New York have been charged with laundering approximately $2 million in drug money to Colombia. ^[1] The 27 people were arrested in a series of raids in which law enforcement agents seized about $300,000 in cash, and found instructions on where in Colombia to wire the money.^[2]

Money Laundering is "[t]he act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced."^[3]
Under 18 U.S.C. § 1956 (2005), subsection (a)(2), it is a crime for a person to transport, transmit, or transfer, (or attempt to transport, transmit, or transfer) a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States with the intent to promote the carrying on of specified unlawful activity, 18 U.S.C. § 1956(a)(2)(A); or knowing that the monetary instrument or funds involved in the transportation represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part- to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity, Id. § 1956(a)(2)(B)(i); or to avoid a transaction reporting requirement under State or Federal law. Id. § 1956(a)(2)(B)(ii).^[4]

The punishment for a violation of 18 U.S.C. § 1956(a)(2) is a fine of not more than $ 500,000 or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater, imprisonment for not more than twenty years, or both. ^[5]

The two-year undercover investigation was conducted by the U.S. Immigration and Customs Enforcement bureau (ICE) and the New York Police Department as part of a task force created in 1992 to investigate financial crimes. ^[6]

The arrests and the closures of 10 of the 24 stores are part of Operation Pinpoint, the latest phase in an effort to drive drug money out of the wire transfer industry.^[7] Under the program, confidential informants directed by ICE agents took large sums of money and lists of names of wire transfer recipients to the targeted wire transfer stores. ^[8]

Previous investigations revealed that the wire transfer or money remitting industry in New York had been largely transformed by narcotics traffickers into a vehicle for sending drug proceeds to drug source countries, primarily Colombia. ^[9]

The industry is designed partly to serve recent immigrants in the United States who do not have bank accounts and need to send money home to relatives. ^[10]

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[1] After Raids, Police Charge 27 with Laundering Drug Money, Associated Press via The New York Sun, February 8, 2007.
[2] Id.
[3] Black's Law Dictionary 1027 (8th ed. 2005).
[4] 18 U.S.C. § 1956 (a)(2)(2005).
[5] Id.
[6] Raids, supra note 1.
[7] Id.
[8] Id.
[9] Id.
[10] Id.