Dallas Money Laundering Lawyer | Financial Crimes Defense

Understanding Money Laundering in Texas: A Comprehensive Guide

Money laundering is a complex crime that carries significant penalties, especially in the state of Texas. This article aims to provide a comprehensive understanding of money laundering as defined by Texas law, the penalties associated with it, and how our attorneys at Varghese Summersett can help navigate these complex legal waters. This article focuses on state money laundering charges. You can visit our federal money laundering page here.

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What is money laundering in Texas?

Money laundering, as defined by Texas Penal Code Chapter 34, involves knowingly acquiring or maintaining an interest in, concealing, possessing, transferring, or transporting the proceeds of criminal activity. It also includes conducting, supervising, or facilitating a transaction involving the proceeds of criminal activity. In simpler terms, money laundering is the process of making illegally-gained proceeds appear legal.

In other words, money laundering occurs when a person conceals money acquired through illegal activity.

Money laundering is a process used to make illegally-gained proceeds (“dirty money”) appear legal, a process often referred to as “cleaning.” It usually involves three steps: placement, layering, and integration. We will discuss these concepts in more detail below.

Money laundering is often glamourized by the media and has become the plotline in films and television shows such as The Godfather, Goodfellas, Ozark, and Breaking Bad. Some are valid depictions, but none of them can fully convey the risk or hardships of facing a serious felony charge.

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How does money laundering work?

While these are not legal elements of the offense, money laundering generally includes three steps:

three steps: placement, layering, and integration.

  1. Placement: This is the process of introducing illicit money into the financial system. This might be done by breaking up large amounts of cash into less conspicuous smaller sums that are then deposited directly into a bank account, or by purchasing a series of instruments (such as checks or money orders) that are then collected and deposited into accounts at another location.
  2. Layering: The second step is often about making the money difficult to trace. This might be accomplished by moving the funds around to create confusion, sometimes by wiring or transferring the money through numerous accounts, or even using shell companies. The money might be used to purchase high-value items such as real estate, cars, or jewelry, which can then be sold. The purpose of this stage is to make it more difficult to detect and uncover laundering activity. It is during this stage that money launderers often use techniques such as anonymous shell companies or offshore accounts.
  3. Integration: The final step involves merging the now-clean money back into the legitimate financial system, where it can be used freely without suspicion. The launderer might choose to invest the funds into real estate, luxury assets, or business ventures.

What are the Texas penalties for a money laundering conviction?

Texas money laundering offense classification is determined by the amount of money involved, per Texas Penal Code Section 34.02.

State jail felony: The value of funds is $2,500 or more but less than $30,000, punishable by up to two years in jail and $10,000 fine.

Third-degree felony: The value of funds is $30,000 or more but less than $150,000, punishable by up to 10 years in prison and a $10,000 fine.

Second-degree felony: The value of funds is $150,000 or more but less than $300,000, punishable by up to 20 years in prison and $10,000 fine.

First-degree felony: The value of funds is $300,000 or more, punishable by up to 99 years or life in prison and $10,000 fine.

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What are the federal money laundering statutes?

Title 18 of the U.S. Code breaks up the complex federal money laundering statute into two sections.

Section 1956: Prohibits financial transactions that are designed to promote unlawful activity or disguise the source of the illegally gained money.

Section 1957: Prohibits financial transactions involving illegally gained money exceeding $10,000.

These laws allow the government to bring several types of money laundering charges, often through sting operations. These charges could include transaction money laundering, international money laundering, and reverse money laundering.

What are the penalties for federal money laundering?

A money laundering conviction could bring a maximum 20-year sentence in federal prison and a fine of up to $500,000.

Important note: Money laundering charges allow federal authorities to seize any money and other related property through a civil asset forfeiture judgment.

What are the elements of a money laundering offense in Texas?

In Texas, the elements of a money laundering offense are defined under Texas Penal Code Section 34.02. To be convicted of money laundering, the state must prove beyond a reasonable doubt that a person:

  1. Knowingly: The person must be aware of their actions, meaning they must knowingly engage in the activities outlined below. Accidental or unknowing involvement in a money laundering scheme is not enough to secure a conviction.
  2. Acquires or Maintains an Interest in, Conceals, Possesses, Transfers, or Transports the Proceeds of Criminal Activity: This means that the person must be involved in handling the money or other assets that have been gained from criminal activity. This can include a wide range of actions, from physically moving cash to transferring digital funds.
  3. Conducts, Supervises, or Facilitates a Transaction Involving the Proceeds of Criminal Activity: This element covers the act of managing or overseeing a transaction that involves money gained from criminal activity. It can also include facilitating such a transaction, such as by providing a location or a bank account for the transaction to take place.

The “proceeds of criminal activity” can refer to any money or other assets gained from any offense that is classified as a felony under the laws of Texas, another state, or the United States, or punishable by confinement for more than one year under the laws of another state.

Recent Cases of Money Laundering in Texas

Recent cases in Texas have highlighted the seriousness with which the state treats money laundering. For instance, there have been instances where individuals have been charged with money laundering related to fraudulent Paycheck Protection Program (PPP) loans. In another case, Texas real estate valued at $58 million was implicated in a money laundering scheme by Mexican kleptocrats.

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What are the defenses to money laundering charges?

Money laundering can be complicated, and a specific case could include complex financial dealings that aren’t illegal. Our Dallas money laundering lawyer could potentially show that the charged offense is not money laundering.

Potential money laundering defenses could include the following:

  • The case doesn’t involve a monetary or financial transaction.
  • The money is not “dirty” and comes from a source other than criminal activity or a fraud case. One possibility is the “merger” issue—where the conduct charged as “specified unlawful activity” consists primarily of a financial or fraud offense, and the financial and money laundering offenses are so connected that there is not a clear delineation between the underlying financial offense and the money laundering offense.
  • The person charged doesn’t know the money is “dirty.”
  • The transaction is not for an unlawful purpose.

If the money laundering charge is based on a sting operation, it may be possible to show that there was no criminal conduct because of entrapment.

Need an Expert Financial Crimes Defense Lawyer? Call Us

If you or a family member is facing money laundering charges, it’s vital that you consult with a Dallas money laundering lawyer as soon as possible.

Money laundering is taken very seriously by prosecutors, and a conviction could dramatically alter your life.
The defense team at Varghese Summersett has decades of experience defending financial crimes.

For a complimentary consultation on your case, call us at 214-903-4000.

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