What is Money Laundering in Arizona?

Whether in the Phoenix area, or anywhere in Arizona, per ARS §13-2317 “Money Laundering” is defined as the transferal of illegally-obtained money between multiple points to make the money’s source untraceable. This crime is one of the most serious of the white collar crimes and is charged in three different degrees of seriousness, each carrying different penalties. The different degrees are most easily explained out of order.

Money Laundering – Second Degree

Money Laundering in the Second-Degree can be charged based on a wide variety of behaviors.  Below are the provisions that most people are charged with violating.  When a person:

1. acquires or maintains an interest in, transacts, transfers, transports, receives or conceals the existence or nature of racketeering proceeds, knowing or having reason to know that they are proceeds of that offense;
2. makes property available by a transaction to another knowing that it is intended to be used to facilitate racketeering;
3. conducts a transaction with the intent to conceal or disguise the nature, location, source, ownership or control of the property  knowing that the property involved are the proceeds of an offense;
4. intentionally or knowingly makes a false statement or a misrepresentation or omits a material entry in any application or financial statement or account records under Title 6, chapter 12 of the Arizona statutes (basically all financial documents);
5. intentionally or knowingly attempts to evade any reporting requirement under the Code of Federal Regulations;
6. intentionally or knowingly falsifies or attempts to conceal the identity of any person in connection with the transaction; and
7. in connection with the money laundering transaction, the person utilizes a forged instrument;

Money Laundering – First Degree

Money Laundering in the First-Degree occurs if a person knowingly initiates, organizes, plans, finances, directs, manages, supervises or is in the business of conducting any of the above activities.  Basically, Money Laundering in the First-Degree is being the leader, boss, or creator of any of the Money Laundering in the Second-Degree activities. Money Laundering in the First-Degree can also be charged when any of Second-Degree Money Laundering activities are done in the course of, or for the purpose of, facilitating terrorism or murder.

Money Laundering – Third Degree

A person can be charged with Money Laundering in the Third-Degree if in the course of any transaction transmitting money, he intentionally or knowingly confers or agrees to confer anything of value on a money transmitter or any employee of a money transmitter that is intended to influence or reward any person for failing to comply with any requirement under title 6, chapter 12 (financial banking and disclosure requirements). The employee of a money transmitting business can also be charged with Money Laundering in the Third-Degree if they allow themselves to receive something of value in exchange for failing to comply with any requirement of Title 6, Chapter 12.

If you have been charged with Money Laundering in violation of Arizona law, Call 602-307-0808 for a Free Initial Consultation or click the green button below.

Possible Penalties for Money Laundering

“First-Degree” is a class two (2) felony. For a first offense, punishment can be probation with zero (0) days in jail up to one (1) year in jail, or prison of three (3) years to twelve and one half (12.5) years of incarceration. If the person has one (1) allegeable historical prior conviction, then the “prison only” range is four and one half (4.5) years to twenty-three and one quarter (23.25) years in prison. If the person has two (2) allegeable historical prior convictions, then the “prison only” range is ten and one half (10.5) years to thirty-five (35) years of incarceration.

“Second Degree” is a class three (3) felony. For a first offense, punishment can be probation with zero (0) days in jail up to one (1) year in jail, or prison range of two (2) years to eight and three quarters (8.75) years in prison. If the person has one (1) allegeable historical prior conviction then the “prison only” range is three and one half (3.5) years to sixteen and one quarter (16.25) years of incarceration. If the person has two (2) allegeable historical prior convictions, then the “prison only” range is seven and one half (7.5) years to twenty-five (25) years of incarceration.

“Third Degree” is a class six (6) felony. A first offense can entail probation with zero (0) days in jail up to one (1) year in jail, or prison of four (4) months to two (2) years of incarceration. If the person has one (1) allegeable historical prior conviction, then the “prison only” range is nine (9) months to two and three quarters (2.75) years in prison. If the person has two (2) allegeable historical prior convictions, then the “prison only” range is two and one quarter (2.25) to five and three quarters (5.75) years of incarceration.

In addition to all other penalties, if a person commits First-Degree or Second-Degree Money Laundering and the violations involve a total of $100,000.00 or more in any twelve (12) month period, the person is subject to forfeiture of substitute assets in an amount that is three (3) times the amount involved in the pattern of conduct, including conduct that occurred before and after the twelve (12) month period.

Possible Defenses for Money Laundering

The main defense to Money Laundering is the defendant’s lack of knowledge that the funds were racketeering proceeds or were going to be used to fund racketeering activities, and lack of intent to conceal or disguise the nature of certain funds or influence any financial documents. This is usually a valid defense when a person is merely an employee of a business, or a non-involved partner who is basically “duped” into managing a business whose proceeds are the result of an illegal activity. This defense can be supported with evidence from the company’s financial statements or accounting records showing material misrepresentation or omissions, committed by someone else other than the defendant. Many times one devious business partner will ask another partner to “sign off” on certain loan documents or tax returns without telling the defendant that the fraudulent information is false.

Just because a defendant has signed off on paperwork that might be designed to cover up the source of money or funds does not mean the defendant actually knew about the source of the funds. It is important to interview all of the parties involved to ascertain the defendant’s good character and honesty and lack of control over this area of the company’s finances, and to emphasize the partner’s bad character. Another defense that is applicable is tracing the funds involved in the transactions and proving that these specific funds did not fund, nor were the proceeds of, any racketeering activity. The defenses for Money Laundering are quite complex (as are all types of white collar crimes) and involve many hours of records research by attorneys and expert witnesses. It is often beneficial to utilize a “forensic accountant” to also go through the documents in order to defend against the Government’s allegations.

How can a Defense Attorney Help

Additionally, because our law firm fights conviction from all angles, we would assert a wide range of defenses and challenges to constitutional violations that apply in all criminal cases. The possibilities are numerous and diverse. One of those we frequently assert is a “Miranda rights violation.” In Arizona, the standard of whether any incriminating statement (i.e., a statement which tends to admit guilt) is admissible into evidence is based upon a “voluntariness” standard. If we can demonstrate that the police coerced you (i.e., intimidated or tricked you) into making a confession or inculpatory statement, or that they did not properly read you your Miranda Rights, then we can suppress those statements and any evidence gathered as a direct result of those statements. In addition, the “denial of right to Counsel” is another common defense which is often raised. This occurs when a suspect is in custody and requests to speak to their attorney, but is denied and questioning continues.

Other defenses may include challenging the validity of any search warrant, or whether there were any “forensic flaws” during the investigation of your case. Depending on what else you have been charged with, this could include exposing flawed procedures regarding fingerprints analysis; computer analysis/cloning hard drive procedures; GPS tracking monitors; forensic financial accounting reviews; etc.. Lastly, one of the most common defense tactics is exposing sloppy or misleading police reports which include everything from misstatements, false statements, flawed photo line-ups and inaccurate crime scene reconstruction. It is important to hire a skilled Money Laundering lawyer to defend you who has knowledge of all the possible defenses to assert in your case.