Anyone who has ever watched a mobster movie is likely familiar with the concept of money laundering. It involves taking “dirty” money earned illegally that can't be used as-is without alerting authorities and “washing it” through a legal enterprise to make it possible to use the illicit cash. California even has a specific statute, Health & Safety Code §11370.9, that specifically outlaws laundering money that is connected to the manufacture or sale of controlled substances. There are many ways cash can be illegally laundered through a separate, legitimate business. Consider the following example:
A narcotics dealer makes thousands of dollars illegally through the sale of controlled substances in California. She doesn't have a real job, and spending much of her large stockpile of cash would raise eyebrows in the community and possibly with the IRS. She opens a bakery, and despite having almost zero actual income from customers she seeds her illegal cash into the registers each day. On paper, the bakery is incredibly profitable and she even reports this income on her taxes. This activity is an example of money laundering under CAH&S §11370.9.
Money laundering is what is known as a “wobbler” offense; it can be charged as either a felony or a misdemeanor by the prosecutor. An experienced criminal defense attorney may be able to negotiate a felony money laundering charge into a misdemeanor, or even convince a prosecutor not to bring charges at all.
What is Money Laundering According to CA H&S §11370.9?
There are three major elements to money laundering under §11370.9. A prosecutor must prove:
- You received or acquired proceeds, or engaged in a transaction involving proceeds, you knew came from the sale or transportation of a controlled substance;
- You did so with the intent to disguise the ownership, source, or location of the proceeds; and
- The proceeds totaled at least $25,000 in a 30-day period.
In other words, simply receiving or acquiring the proceeds of an illegal sale of a controlled substance would not result in a charge of money laundering under §11370.9 if you did so without any intent to disguise ownership, source, or location of the funds. Likewise, you would not be in violation of §11370.9 if you met all the other elements of the crime but the dollar amount was less than $25,000 or if you didn't know the money came from the sale or transportation of illegal drugs. While some of these elements are straightforward, it can be hard to prove whether you had the intent to disguise or if you knew the proceeds in questions were obtained illegally. An experienced criminal defense attorney knows how to reach a jury, cut through any distractions brought up by the prosecutor, and put forward a strong defense.
Crimes Commonly Associated with Money Laundering
There are a variety of drug crimes the proceeds of which can be the basis for a money laundering case. The language of §11370.9 is broad and encompasses an array of crimes related to the sale and distribution of controlled substances. These crimes include but are not limited to:
- Sale or Transportation of Methamphetamine (CA H&S§11379)
- Sale or Transportation of a Controlled Substance with Intent to Sell (CA H&S§11352)
- Sale of Synthetic Stimulants (CA H&S§11375.5)
- Sale of Marijuana (CA H&S§11360)
- Sale of Marijuana to a Minor (CA H&S§11361)
Potential Penalties for Money Laundering Conviction
As discussed previously, a money laundering charge under H&S§11370.9 can be considered a misdemeanor or a felony. It is the prosecutor's decision on which charge to bring, and he or she will typically use your criminal history and the facts surrounding the case to make that determination. The language of the statute provides for a wide range of possible outcomes:
A violation of this section shall be punished by imprisonment in a county jail for not more than one year or in the state prison for a period of two, three, or four years, by a fine of not more than two hundred fifty thousand dollars ($250,000) or twice the value of the proceeds or property involved in the violation, whichever is greater, or by both that imprisonment and fine. Notwithstanding any other provision of law, each violation of this section shall constitute a separate, punishable offense without limitation.
In other words, if the prosecutor charges the crime as a misdemeanor you face a maximum of one year in jail and a $1,000 fine common among misdemeanors. If you are charged with a felony you face a prison sentence of up to four years and a maximum fine $250,000 or double the value of the proceeds involved in the crime, whichever is greater.
There is clearly a stark difference in the legal jeopardy you face depending on whether the crime is charged as a felony. or a misdemeanor. Part of your attorney's job will be to show the prosecutor the strength of your case in an attempt to have the charges lowered to a misdemeanor or not pursued at all.
Common Defenses to Charges of Money Laundering in California
Because of the varying elements required to prove money laundering under H&S§11370.9, your attorney will have multiple potential defenses to explore. Additionally, it is up to your criminal defense attorney to ensure that law enforcement never violated your constitutional rights during the course of your arrest. Any evidence collected during an illegal search of your car, home, or person cannot be used against you at trial.
You Lacked the Necessary Criminal Intent
One defense against a charge of money laundering is that you did not enter into the transaction in question with the intent to disguise any part of the transaction or the source of the funds. This means that there are some expenditures of ill-gotten cash that do not rise to the level of money laundering. Consider the following example:
A drug dealer wishes to purchase a motorcycle, not for an attempt to launder money but solely because he's always wanted one. He uses the cash acquired from selling narcotics to buy the motorcycle outright. The motorcycle is one of the best available, costing him well over $25,000. Even though the drug dealer knowingly was involved in a transaction using drug money in an amount greater than $25,000, he lacked the intent to disguise the ownership, source, or location of the proceeds to make this transaction money laundering.
You Lacked the Knowledge that the Proceeds Stemmed from Illegal Activity
Another potential defense involves showing the jury you didn't know the source of the proceeds used in the transaction. Even if every other element is met, you aren't guilty of money laundering if you aren't aware that the money comes from the sale or transportation of illegal narcotics. Consider this example:
A drug deal approaches his neighbor about buying his neighbor's boat. The deal isn't interested in the boat, but sees it as an opportunity to unload some cash derived from illegal drug sales. The dealer can then later sell the boat with the sale proceeds being effectively clean money. Assuming the boat is worth more than $25,000, the drug dealer could be charged for money laundering. However, if the neighbor was unaware that the money used to buy his boat was from the sale of drugs he hasn't committed a crime.
The Amount of Money Laundered was less than Required by Law
There is a minimum dollar amount of $25,000 that must be met to qualify as money laundering. This doesn't have to be a single transaction; a series of transactions over the course of 30 days that total more than $25,000 would count. The 30-day period allows for the prosecution of money laundering operations that involve either one large transaction or potentially many smaller transactions. Your attorney may be able to win an acquittal in your case if he or she can show a jury that the total value of proceeds in question is less than the required amount.
Law Enforcement Violated your Constitutional Rights
Regardless of whether or not a crime was committed, you are protected by the Constitution from illegal searches and seizures by the government. Police acting without a warrant or probable cause can taint any evidence collected during the illegal search. Known as “fruit of the poisonous tree,” any subsequent evidence that was discovered due to the illegal search cannot be used at trial, including physical evidence and even admissions.
Hiring the Right California Money Laundering Defense Attorney
If you have been charged with money laundering under Health & Safety Code §11370.9, the stakes are especially high. Money laundering is a “wobbler” offense, and it's up to the prosecutor to decide to charge you with either a misdemeanor or a felony. An experienced criminal defense attorney may be able to show the prosecutor that felony charges are inappropriate in your case. In some cases, an attorney may be able to have the charges dropped altogether. William S. Kroger is an experienced criminal defense attorney that understands your freedom and livelihood are at stake. The William S. Kroger Law Firm is ready to review your case and help you put forward the best defense possible. Contact the William S. Kroger Law Firm today for a free consultation.