Laws as "Instruments of Oppression"
"Laws as Instruments of Oppression"
Abuses of "Antidrug Legislation", of "Money Laundering and Forfeiture
Laws. Human Rights Violations under "Color of Law", "Appearance of
Justice" and a facade of "Due Process".
As nightfall does not come at once, neither does oppression. In both
instances, there's a twilight where everything remains seemingly unchanged,
and it is in such twilight that we must be aware of change in the air, however
slight, lest we become unwitting victims of the darkness.
Supreme Court Justice William O. Douglas
Laws as Instruments of Oppression
The Misapplication of the Money Laundering Laws
An Example of Money Laundering Law Misapplication
"Antidrug Legislation" - The Money Laundering Laws.
The Bank Secrecy Act (BSA) of 1970
The Comprehensive Money Laundering Control Act of 1986
The Money Laundering Control Amendments of 1988
The Anti-Drug Abuse Act of 1988
The "Sting" Money Laundering Statute (18 U.S. Code, Section 1956 (a)(3)
Title 18, U.S.C. Section 1956 - 1957- An Overview of The Money Laundering
Statutes
The potential for abuse of the money laundering laws
The Unconstitutionality of the Money Laundering "Sting" Statute, Title 18,
U.S. Code, Section 1956 (a)(3)
Forfeiture Laws
An Essay You Must Read About the "New Laws" and the Rape of our Constitution.
Laws as "Instruments of Oppression"
Good laws should derive their authority from their adherence to natural laws,
and by common sense. A society needs good laws to fight crime and to protect
human rights. However, every government in history has manufactured certain
laws and punishments to coerce "obedience" from an "unwilling" population.
These laws, in their mature forms, always display one common characteristic,
unconscionably harsh penalties for alleged infractions committed. They possess
no intrinsic moral authority and the sole purpose of enforcement is the police
power of the government over peoples' private lives. Individual citizens, or
society in general, have no stake in and no commitment to such laws. Society
does not get any benefits from unreasonable prosecutions. In fact resources
and taxpayers' money are wasted.
To keep the people entrapped and the facade of "justice", a maze' of
(so-called) victim-less crime laws have been imposed on Americans in recent
years. These liberty destroying oppressive laws control the enslaved victims
with the instilled fear of heavy fines, and imprisonment for acts that harm no
other individual.
Through improper application of such "laws" and through abuse of the criminal
justice system, thousands of Americans have been deprived of their God-given
unaliable-right to freedom. Recently, improperly defined "laws" have been
enacted which are used to prosecute and convict targeted Americans and to
confiscate their property. Some of these new laws even permit prosecutors to
prearrange hypothetical thought crimes and evidence with guaranteed conviction
and level of sentencing. These new statutes have been turned into "instrument
of repression and oppression" that belong more appropriately in third world
countries that our Government accuses of human right violations. Human right
violations (well disguised certainly) occur with frequent regularity in our
own country. More and more frequently these new laws are improperly applied
against selectively targeted individuals. This signifies a trend which will
continue and will eventually encompass others. It is like an insidious virus
that has lied dormant and now is spreading and expanding in a geometric
progression. It is an early phase of fascism.
Legal fictions have been an accepted part of the common law tradition but
today, we have new and malignant fictions which are designed to evade the
evidence requirements of the Sixth Amendment in any legal proceeding.
Unfortunately a system such as this so violates the American spirit of fair
play that it brings the law and the process by which it is applied into
disrepute. The word "justice" no longer has a connotation of fairness. It has
a connotation of retribution and punishment.
Punishement is as unfair as the misapplication of such laws. Now we have
justice by recipe in our country with handed down simplistic issues that are
cut and dry. Judges and prosecutors just open the cookbook of "justice" and
search for a credible offense or issue that can justify the government's
improper actions. They extrapolate here and interpolate there. And, thus, with
the impartial guidance of such cookbooks they arrive at decisions. These
cookbooks are called "Mandatory Sentencing Guidelines". Who would ever have
imagined that adjudication of "legal" matters in our country could be so easy?
Who would have ever thought that severe punishments would take place in our
country and that millions of Americans would be either in prison or under the
supervision of the courts? Who, indeed?
Millions of people in our country are disenchanted with the way in which the
laws are being enforced. There is growing hostility, resentment and disrespect
for the injustices and the legal manipulation of the law by government agents
and prosecutors. So these draconian laws against citizens and minorities are
not simply unjust and unfair. They do more harm than good. They destroy
families, they destroy individuals, and they are doing a tremendous amount of
harm to our country. We have more people in prison in this country than any
other country in the world. Our government recently allocated billions of
taxpayers' money for more prisons, most of them to house "marginal offenders"
while , at the same time, trying to "balance" the federal budget.
Government policies to fight the epidemic of drugs are failing. So called
anti-drug legislation and "money laundering laws" are applied selectively by
government attorneys for purposes other than those intended by Congress. They
have been excuses to violate civil rights. In many ways, the drug wars has
become a war on people. The new drug laws have very little to do with drug
related offenses. They have become instruments of oppression against ordinary
citizens. Our society is decaying, and part of the decay is not the drug
problem that we have. It is the misapplication of the drug related statutes
and the unchecked misconduct of governent attorneys. Unable to deal
effectively with professional criminals, federal prosecutors often use the
drug-related laws against politically-targeted individuals, tax protestors,
First amendment advocates or any one perceived to be a "threat" to the
established order. Some of the actions of law enforcement agents or governemnt
attorneys are premptive.Prosecutions and seizures have become a major legal
industry. Enlightened political, judicial, social leadership is essential. It
is very unfortunate for our country, which once was the shining beacon to the
world, the nations of the world, as a place of freedom. We need to redefine
ourselves a little better around the term "justice" and "fairness". Given the
present trend, our society and our basic freedoms are in great jeopardy.
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The Misapplication of the Money Laundering Laws
Money Laundering is a ubiquitous term used to cover many kinds of possibly
illegal transactions. It is this ambiguity that is confusing to many legitimate
business persons. It becomes very easy for government agents to target high
profile affluent people (usually people with assets to forfeit ), catch them at
a vulnerable point and then maneuver them over a period of time so that they end
up breaking a law that they might not have known even existed. The vague
language of the money laundering laws has made it easy for government attorneys
to escalate any offense involving any type of monetary transaction, into a money
laundering offense with extremely high sentencing level and obtain
"convictions", usually through "plea bargaining". Essentially, in money
laundering cases, "plea-bargaining" become a threatening negotiation because
government attorneys have a "big stick" with which to beat a defendant to
submission: the money laundering laws. Because of the high sentencing levels and
the easiness to convict under these laws, government attorneys have an easy time
"persuading" defendants, particularly those involved in minor offenses, to plead
guilty rather than risk a guaranteed long prison sentence. For defendants who
cooperate or even agree to become government informers, the sentencing is
relative lenient in spite of the so-called "mandatory sentencing guidelines".
The "mandatory sentencing guidelines" and enhancements for "obstruction of
justice"are reserved for those stubborn enough to plead "not guilty" and to ask
for a trial. To "persuade" the stubborn to plead guilty, often government
attorneys will issue collateral indictments and/or superseding indictments
charging defendants with additional "crimes" for which there may be no valid
basis. Frequently, the" plea bargaining" process is repeated again and again
until a defendant is coerced to forego trial by pleading "guilty" to one or more
counts of an indictment. With such tactics and through the misapplication of the
money laundering laws, government attorneys can get easy "convictions".
In recent years the money laundering laws have been used as instruments of
oppression in our country against many targeted individuals. Charging and
"plea-bargain" practices of federal prosecutors for alleged "money laundering
offenses" have been excessive and abusive.
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"Antidrug Legislation" -The Money Laundering Laws
Before discussing the Money Laundering Laws the following background information
on previous banking laws is provided.
The Bank Secrecy Act (BSA) of 1970
Government efforts to regulate currency transactions go back many years.
Combatting drug trafficking and money laundering did not require the money
laundering laws which were passed in 1986. There were laws already in the books.
In 1970, the House Committee on Banking was instrumental in the enactment into
law of the Bank Records and Foreign Transaction Act (Public Law 91-508). That
law contained the Currency and Foreign Transaction Reporting Act, which together
with certain record keeping provisions is commonly referred to as the Bank
Secrecy Act (BSA). The primary purpose of the reporting requirements of the BSA
was to identify the sources, volumes and movements of U.S. currency which was
transported into or out of the country or being deposited in financial
institutions. Presumably, this information was used as a primary tool in
assisting law enforcement officials in the detection, investigation, and
prosecution of certain crimes. Allegedly this was an effort to combat "crime".
In reality it was nothing more than a government effort to regulate the
financial transactions of all Americans.
The Bank Secrecy Act 1970 required that certain records be made and retained by
financial institutions. Specifically, the Act authorized the Secretary of the
Treasury to require financial institutions to keep records of the identities of
persons having a bank account in the United States and others acting on their
behalf.The Act required all financial institutions to verify and record the
identity, identification and address of all persons wishing to transfer $10,000
or more, or those who were in receipt of $5000 or more in cash. This
questionable procedure is known as currency transaction reporting (CTR) and is
continuing to this day. However, the limits have been lowered. Banks are
expected to report any cash transactions of $3,000 or more. Millions of such CRT
reports are filed by the banks every year to the IRS's central computer.
The Comprehensive Money Laundering Control Act of 1986
The Department of Treasury and its Internal Revenue Service had lobbied
extensively for the BSA's passage. The IRS had been given primary jurisdiction.
They weren't satisfied. Although the BSA was an effective tool in detecting
"criminals" who used financial institutions to further their "illegal activity",
Treasury's pressure on the Congressional Banking committees continued.
Presumably amendments to the BSA and other legislative initiatives were needed
to combat the "astronomical rise in drug trafficking and money laundering
schemes". This claim was true to some extent. Indeed money laundering activities
from drug trafficking had increased. There was a need for a statute that would
prevent the money laundering activities of organized crime from drug
trafficking.
For the next sixteen years the Treasury Department kept on pressuring the House
and Senate Banking Committees to introduce and pass legislation to "upgrade"
BSA's enforcement requirements. From time to time, these Committees conducted
hearings on how enforcement by the IRS could be toughened.
In 1986, the House Committee responded to this pressure of government lobbyists
by holding four days of hearings. On July 22 of that year, by a vote of 47-0,
the House Banking Committee endorsed amendment H.R. 5176, the Comprehensive
Money Laundering Prevention Act. H.R. 5176 was incorporated into H.R. 5484, the
Omnibus Drug Bill, which was passed by the House in September of 1986, as
"Drug-Related" legislation. Drug-related legislation was as sacred as apple pie
and motherhood. The overwhelming Congressional support was no surprise. No
Congressman would have dared to vote against such a well-packaged, piece of
"drug" legislation. No one realized the potential for abuse of these laws.
Thus the Comprehensive Money Laundering Contol Act of 1986 resulted in the
enactment of Title 18, U.S.C. Sections 1956 and 1957. This legislation made
money laundering a major crime with an unusually high level of sentencing.
Specifically, the Money Laundering Control Act of 1986 identified two kinds of
offences; financial transaction money laundering and financial institution money
laundering.
The Money Laundering Control Amendments of 1988
Legislative History: On June 8, 1988, the House Committee on Banking, Finance,
and Urban Affairs (Banking Committee), under the chairmanship of Rep. Fernand J.
St. Germain, held a hearing on proposed amendments to the money laundering laws.
In his opening statement before the Committee, Chairman St. Germain set the
stage for the hearing as follows:
"It is news to no one that drugs generate massive sums of cash. This cash must
be laundered-slipped into the main stream of commerce if the drug traffickers
are to be successful. We intend to make these laundering operations as difficult
and costly as possible. We cannot allow financial institutions, insured by the
U.S. Government, to be used- whether by accident or design.
The subject of money laundering and the use of financial institutions to launder
funds derived from illegal sources such as drug trafficking is not new to the
Committee. In fact, over eighteen years ago, the Committee on Banking
concentrated its efforts on ways to combat drug trafficking, organized and white
collar crime, tax evasion and other crimes in which criminals use the nation's
financial institutions as a means to conceal or launder funds."
Following this introduction, Gerald L. Hilsher, Deputy Assistant Secertary (Law
Enforcement) Department of the Treasury, and Victoria Toensing, Deputy Assistant
Attorney General, Criminal Division, United States Department of Justice,
testified. These government witnesses from Treasury and Justice emphasized the
need to enact legislation "to prevent the laundering of money through financial
institutions for illegal purposes".
Based upon this testimony and without much floor discussion, the Banking
Committee then justified the need for the proposed legislation. The need for
amendments was additionally justified on the basis that most of the provisions
of H.R. 5176, the Comprehensive Money Laundering Prevention Act, had been
contained in Subtitle H of Title I of the "Anti-Drug Abuse Act of 1986" (Public
Law 99-57Q). However, it was argued that certain provisions of H.R. 5176 were
not included by the Senate in their version of the 1986 anti-drug proposals, and
consequently did not become part of the 1986 Act. Thus the House Banking
Committee was determined to include provisions of H.R. 5176 not enacted into law
become part of the proposed 1988 amendments.
Thus, the Houae Banking Committee took it upon itself to rectify the 1986
ommissions of the Senate, particularly those it believed would improve "law
enforcement efforts to get at the drug traffickers and money launderers without
unduly burdening the record keeping or reporting requirements of financial
institutions".
The Committee did not stop there. It also proposed amendments that curtailed the
financial privacy of Americans such as the 1978 Right to Financial Privacy Act
(RFPA). The RFPA (see Public Law 95-630, the Financial Institutions Regulatory
and Interest Rate Control Act of 1978 (FIRICA)), protects the customers of
financial institutions from unwarranted intrusion into their records while at
the same time permits law enforcement offficials to pursue "legitimate" law
enforcement investigations. The Committee wanted now the passage of an exemption
from the notification requirements under the RFPA to alleged insiders of
financial institutions. This had been ommitted also in the Senate version in
1986 when it had been proposed as part of the amendments to the Bank Secrecy
Act, mentioned earlier. The House Banking Committee wanted an "insider
exemption" provision to RFPA.
On June 9, 1988, the House Banking Committee adopted six amendments and ordered
bill H.R. 4853, the Money Laundering Control Amendments of 1988, to be favorably
reported for ratification by the House membership.
Anti-Drug Abuse Act of 1988
The amendments were well packaged in the Anti-Drug Abuse Act of 1988 which
introduced the Money Laundering Prosecution Improvements Act of 1988, which, in
turn, broadened the scope of predicate acts to include tax evasion and false or
fraudulent statements made in connection with income tax filings.
There were international aspects to this "Anti-drug abuse" legislation which
included a requirement upon the Secretary of State for the Treasury to negotiate
with other countries to ensure that they have adequate records on international
currency transactions, which would be equivalent to the mandatory reporting
requirements of U.S. financial institutions.
In essence, the net effect of the Antidrug Abuse Act of 1988 was by far more
reaching than "antidrug legislation". It required the financial institutions to
report any financial transaction as a suspected criminal violation committed
against a bank or involving a financial transaction carried out through the
facilities offered by the bank or its employees. The implementation of this
legislation placed the unusual and costly burden upon banks and financial
institutions and required them to participate in police functions of the
government while threatening them with draconian penalties for non-compliance.
Furthemore, the guidelines issued by the Office of the Comptroller of Currency
(OCC) defined "suspected violation" as "a transaction or series of transactions
for which there is reasonable cause to believe that a criminal violation has
occurred".
The OCC guidelines added to this burden of policing of the financial
institutions by stating the following:
" The OCC cannot quantify the precise amount of evidence needed to trigger the
reporting requirement any more than it can delineate all the relevant factors
that a bank must consider in deciding whether or not to report a suspicion or
otherwise irregular transactions. In many instances the suspicious nature of the
transaction is a function not only of the transaction itself but also of the
bank's experience with the individuals associated with the transactions, either
as employees or as customers of the bank. In many situations, the bank will be
able to discern the 'intent' of those involved in a suspicious transaction.
Invariably however, the pivotal question of criminal intent will be left for the
determination of law enforcement authorities. All that a bank can do in those
situations is to make a practical assessment of the the suspicious transaction
based upon a good faith examination of all the relevant factors. Clearly, the
more serious the irregularity, particularly if it involves a bank insider, the
greater the obligation upon the bank to fully investigate the matter".
The strict guidelines of OCC gave no alternative to the financial institutions.
Rather than making value judgents of what constituted "criminal activity" and
risking penalties for missing some "criminal activity" for which they could be
severely fined, the financial institutions opted to report every transaction as
a "possible criminal violation". This was definetely an overkill in policing the
financial affairs of all Americans. It had little to do with "antidrug
legislation". The draconian penalties coerced the financial institutions to
become watchdogs and spy and report on all larger financiancial transactions of
their clients.
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The "Sting" Money Laundering Statute (18 U.S. Code, Section 1956 (a)(3)
Included in the the Money Laundering Act Amendments of 1988 was a "sting"
statute, 18 U.S. Code, Section 1956 (a)(3). What members of the Banking
Committee did not realize was that subsection (a)(3), the "sting" provision, was
drafted by some Department of Justice officials to serve for purposes other than
those intended. The language of the statute was left intentionally vague and
generic. The definitions and due process requirements that hold for other
sections of the same law, do not hold for the "sting" statute. The "sting"
statute reads as follows:
Laundering of Monetary Instruments Section 1956 (a)(3)
Whoever, with the intent-
(A) to promote the carrying on of specified unlawful activity;
(B) to conceal or disguise the nature, location, source, ownership, or control
of property believed to be the proceeds of specified unlawful activity; or
(C) to avoid a transaction reporting requirement under State or Federal law,
conducts or attempts to conduct a financial transaction involving property
represented to be the proceeds of specified unlawful activity, or property used
to conduct or facilitate specified unlawful activity, shall be fined $500,000
under this title or imprisoned for not more than 20 years, or both. For purposes
of this paragraph and paragraph (2), the term "represented" means any
representation made by a law enforcement officer or by another person at the
direction of, or with the approval of, a Federal official authorized to
investigate or prosecute violations of this section.
The key words of this statute are "represented" and "any representation". The
use of these words is what made this statute a "sting", and it is the essence of
its subsequent abuse. How the representation is made, and whether it follows due
process of the law. Whether there is any adherence to the way and to the purpose
that Congress intended the law to be used. Whether a clear representation is
made that the proceeds are indeed from a "specified unlawful activity", and what
is the activity."Any representation", for a sting type of an offense, simply
does not meet the due process requirement of our Constitution, particularly for
an offense charging the major crime of "money laundering".
The sting provision in the Money Laundering Control Amendments of 1988, U.S.C
Title 18 Section 1956(a)(3) is one of the most amorphous, ill defined, and
controversial laws ever passed in this country. It is a statute which is being
grossly abused by self-serving prosecutors for a variety of cases unrelated to
Congressional intent.This is the only statute with vague wording and definitions
which apply to sections of U.S.C Title 18 Section 1956(a)(1) and (a)(2) but not
to (a)(3). It allows law enforcement agents and prosecutors to engage in a
variety of undercover "sting" operations for non-drug related,
government-induced, "money laundering thought crimes", without consideration of
due process or of the Fourth, Fifth, or Sixth amendments. In most cases the
government-induced underlying offenses may be minor. However, with the
prosecutor's use of the money laundering statute, even if the government-induced
or circumstantially-represented underlying offense is a petty misdeameanor, the
targeted individual gets hit with a minimum sentencing offense level 20 or 22,
if he even makes a simple deposit in a financial institution of proceeds from
such "ostensibly" represented, by the undercover agent, transaction. Punishment
may be as much as 51 months or more, same as for manslaughter, or major drug
trafficking. Obviously the statute is unconstitutional and in gross violation,
not only of the Fourth, Fifth, and Sixth and amendments, but of the Eighth
amendment as well which provides constitutional safeguards for cruel and
excessive punishments.
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Title 18, U.S.C. Sections 1956 -1957. An Overview of the Money Laundering
Statutes
In summary, the 1986 Act and subsequent amendments (including the 1988
amendments) made it a crime for someone, knowing that the property involved in
a financial transaction represents the proceeds of some form of unlawful
activity, to conduct or attempt to conduct such a financial transaction which
in fact involves the proceeds of a specified unlawful activity with the intent
to: (1) promote the carrying on of specified unlawful activity; (2) conceal or
disguise the nature, location, source, ownership or control of the proceeds of
the specified unlawful activity; or (3) avoid a transaction reporting
requirement under state or federal law. The "sting" provision of 1956 section
(a)(3) provided for the prosecution and punishment of hypothetical crimes
fabricated by government attorneys.
More specifically, Title 18, U.S.C. Section 1956 is stated presently as
follows in the U.S. Code:
Laundering of monetary instruments :
(a)(1) Whoever, knowing that the property involved in a financial transaction
represents the proceeds of some form of unlawful activity, conducts or
attempts to conduct such a financial transaction which in fact involves the
proceeds of specified unlawful activity -
(A)(i) with the intent to promote the carrying on of specified unlawful
activity; or
(ii) with intent to engage in conduct constituting a violation of section 7201
or 7206 of the Internal Revenue Code of 1986; or
(B) knowing that the transaction is designed in whole or inpart -
(i) to conceal or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of not more than $500,000 or twice the value of
the property involved in the transaction, whichever is greater, or
imprisonment for not more than twenty years, or both.
(2) Whoever transports, transmits, or transfers, or attempts 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 -
(A) with the intent to promote the carrying on of specified unlawful activity;
or
(B) knowing that the monetary instrument or funds involved in the
transportation, transmission, or transfer represent the proceeds of some form
of unlawful activity and knowing that such transportation, transmission, or
transfer is designed in whole or in part -
(i) to conceal or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of $500,000 or twice the value of the monetary
instrument or funds involved in the transportation, transmission, or
transfer....whichever is greater, or imprisonment for not more than twenty
years, or both.
Laundering of Monetary Instruments under Section 1956 (a)(3)
Whoever, with the intent-
(A) to promote the carrying on of specified unlawful activity;
(B) to conceal or disguise the nature, location, source, ownership, or control
of property believed to be the proceeds of specified unlawful activity; or
(C) to avoid a transaction reporting requirement under State or Federal law,
conducts or attempts to conduct a financial transaction involving property
represented to be the proceeds of specified unlawful activity, or property
used to conduct or facilitate specified unlawful activity, shall be fined
$500,000 under this title or imprisoned for not more than 20 years, or both.
For purposes of this paragraph and paragraph (2), the term "represented" means
any representation made by a law enforcement officer or by another person at
the direction of, or with the approval of, a Federal official authorized to
investigate or prosecute violations of this section.
For the purpose of the offense described in subparagraph (B), the defendant's
knowledge may be established by proof that a law enforcement officer
represented the matter specified in subparagraph (B) as true, and the
defendant's subsequent statements or actions indicate that the defendant
believed such representations to be true.
Under the 1956 section the current U.S. Code gives the following definitions
for the above offenses:
(b) Whoever conducts or attempts to conduct a transaction described in
subsection (a)(1), or a transportation, transmission,or transfer described in
subsection (a)(2), is liable to the United States for a civil penalty of not
more than the greater of -
(1) the value of the property, funds, or monetary instruments involved in the
transaction; or
$10,000.
(2) the term ''conducts'' includes initiating, concluding, or participating in
initiating, or concluding a transaction;
(3) the term ''transaction'' includes a purchase, sale, loan, pledge, gift,
transfer, delivery, or other disposition, and with respect to a financial
institution includes a deposit, withdrawal, transfer between accounts,
exchange of currency, loan, extension of credit, purchase or sale of any
stock, bond, certificate of deposit, or other monetary instrument, use of a
safe deposit box, or any other payment, transfer, or delivery by, through, or
to a financial institution, by whatever means effected;
(4) the term ''financial transaction'' means
(A) a transaction which in any way or degree affects interstate or foreign
commerce
(i) involving the movement of funds by wire or other means or
(ii) involving one or more monetary instruments, or
(iii) involving the transfer of title to any real property, vehicle,vessel, or
aircraft, or
(B) a transaction involving the use of a financial institution which is
engaged in, or the activities which affect, interstate or foreign commerce in
any way or degree;
(5) the term ''monetary instruments'' means
(i) coin or currency of the United States or of any other country, travelers'
checks, personal checks, bank checks, and money orders, or
(ii) investment securities or negotiable instruments, in bearer form or
otherwise in such form that title thereto passes upon delivery;
(6) the term ''financial institution'' has the definition given that term in
section 5312(a)(2) of title 31, United States Code, or the regulations
promulgated thereunder;
Section (7) ,"specified unlawful activity" encompasses a myriad of violations
covered by many other laws interconnected through an unbelievable statutory
tracking that can bring under the umbrella of money laundering any imaginable
offense. Thus, any violation covered by any such other law which may include
some type of a financial transaction, can be structured by a prosecutor to
include a money laundering offense which in turn can escalate an offender's
sentence, even if the underlying offense is minor.
For example, under this section, ''specified unlawful activity'' means -
(A) any act or activity constituting an offense listed in section 1961(1) of
this title except an act which is indictable under subchapter II of chapter 53
of title 31;
(B) with respect to a financial transaction occurring in whole or in part in
the United States, an offense against a foreign nation involving -
(i) the manufacture, importation, sale, or distribution of a controlled
substance (as such term is defined for the purposes of the Controlled
Substances Act)
(ii) kidnaping, robbery, or extortion; or
(iii) fraud, or any scheme or attempt to defraud, by or against a foreign bank
(as defined in paragraph 7 of section 1(b) of the International Banking Act of
1978; (C) any act or acts constituting a continuing criminal enterprise, as
that term is defined in section 408 of the Controlled Substances Act (21
U.S.C. 848); (D) an offense under section 152 (relating to concealment of
assets; false oaths and claims; bribery), section 215 (relating to commissions
or gifts for procuring loans), any of sections 500 through 503 (relating to
certain counterfeiting offenses), section 513 (relating to securities of
States and private entities), section 542 (relating to entry of goods by means
of false statements), section 545 (relating to smuggling goods into the United
States), section 549 (relating to removing goods from Customs custody),
section 641 (relating to public money, property, or records), section 656
(relating to theft, embezzlement, or misapplication by bank officer or
employee), section 657 (relating to lending, credit, and insurance
institutions), section 658 (relating to property mortgaged or pledged to farm
credit agencies), section 666 (relating to theft or bribery concerning
programs receiving Federal funds), section 793, 794, or 798 (relating to
espionage), section 875 (relating to interstate communications), section 1005
(relating to fraudulent bank entries), 1006 (relating to fraudulent Federal
credit institution entries), 1007 (relating to Federal Deposit Insurance
transactions), 1014 (relating to fraudulentloan or credit applications), 1032
(relating to concealment ofassets from conservator, receiver, or liquidating
agent of financial institution), section 1201 (relating to kidnaping), section
1203 (relating to hostage taking), section 1708 (theft from the mail), section
2113 or 2114 (relating to bank and postal robbery and theft), or section 2319
(relating to copyright infringement) of this title, a felony violation o the
Chemical Diversion and Trafficking Act of 1988 (relating to precursor and
essential chemicals), section 590 of the Tariff Act of 1930 (19 U.S.C. 1590)
(relating to aviation smuggling), section 422 of the Controlled Substances Act
(relating to transportation of drug paraphernalia), section 38(c) (relating to
criminal violations) of the Arms Export Control Act, section11 (relating to
violations) of the Export Administration Act of1979, section 206 (relating to
penalties) of the International Emergency Economic Powers Act, section 16
(relating to offenses and punishment) of the Trading with the Enemy Act, any
felony violation of section 9(c) of the Food Stamp Act of 1977 (relating to
food stamp fraud) involving a quantity of coupons having a value of not less
than $5,000, or any felony violation of the Foreign Corrupt Practices
Act;................and so on
Title 18, U.S.C. Section 1957
Conduct prohibited by Section 1957 of the Money Laundering Control Act of 1986
applies to those circumstances where the offence takes place in the US or in
the special maritime and territorial jurisdiction of the US or where the
offence takes place outside the US but the defendant is a US citizen. It
applies to reporting requirements.
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The Pontential for Abuse of the Money Laundering Laws
In essence, the passage of the Money Laundering Control Act of 1986 created a
new class of money laundering "crimes" which encompassed just about every
imaginable offense that a prosecutor could charge. Given the vague language of
the statute and without specific guidelines to federal prosecutors, created
the potential for abuse. With increasing frequency these laws have been used
selectively by federal attorneys to "criminalize" and prosecute"politically
incorrect" Americans for a variety of "offenses". These laws have been used
systematically, not only against drug traffickers, but also to punish those
Americans who for some reason were targeted as being outside the established
economic, political and social order. Ironically, U.S. Government Agencies and
major establishment-connected banks who have been the greatest violators of
money laundering activities globally, were never prosecuted for their money
laundering activities. The only exceptions were BCCI and American Express.
Their prosecution under the money laundering laws amounted to nothing more
than a slap on the hand. The U.S. banks that were closely affiliated with BCCI
did not even receive a reprimand. In the case of American Express, the entire
blame was placed on a low level, "ethnic" manager of a small Florida branch.
No one else in American Express was prosecuted. The government "settled" the
case for approximately $50 million. Similarly many other similar criminal
cases of money laundering have been "settled" like civil cases through the
imposition of "fines" and without criminal sanctions. The criminal sanctions
are usually reserved for the small time offenders and the "politically
incorrect".
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The Unconstitutionality of the Money Laundering "Sting" Statute, Title 18, U.S.
Code, Section 1956 (a)(3).
The Money Laundering "Sting" Statute, Title 18, U.S. Code, Section 1956 (a)(3)
violates the Fourth, Fifth, Sixth and Eighth Amendments of our Constitution by
permitting the improper prearrangement and orchestration of a "crime" and the
fabrication of the evidence with guaranteed conviction and level of
sentencing. Convictions are easily obtained through a prearranged, low
threshold of proof. Abuses of the "sting" statute have been attested and
documented by numerous sources, testimonies, newspaper and magazine articles,
government records of public hearings, improper prosecutions documented by
caselaw, and even by the U.S. Sentencing Commission's internal and independent
findings; the latter suggesting that due process was not followed in the
application of the "sting" statute and that as many as 68% of the persons that
have been convicted may be due to misrepresentations by law enforcement
officials using this "sting" statute. These 68% of convicted individuals never
believed that they were involved in a financial transaction which included
"proceeds of an unlaful activity", because no such representation was made by
law enforcement officers. Most of those convicted were coerced into plea
bargaining because of the high sentencing level of money laundering offenses.
In brief, the record proves unprecedented abuses. Continuing misapplication of
this law by federal prosecutors is subverting and undermining our Criminal
Justice System. Also, its continuous abuse raises greater issues and
philosophies that basic constitutional freedoms and guarantees are threatened
in our country.
Why is the "sting" Money Laundering Statute Unconstitutional?
Fourth Amendment Violations: The statute violates clearly the Fourth
Amendment's guarantee of the right of the people to be secure in their persons
against unreasonable searches. The "sting" itself, particularly when
outrageously applied and orchestrated, often without sufficient probable
cause, is a form of unreasonable search and invasion of privacy.
Fifth Amendment Violations: The "sting" statute violates the Fifth Amendment
and due process against self-incrimination in that no warning is given to the
targeted person and no Miranda rights are read that any statements made (even
the absence of statements or questions, interpreted as "willful neglect") will
be used against a defendant for money laundering or any other type of
prosecution. More often than not, the "sting" turns into a witch hunt and an
unethical fishing expedition, after the undercover agent wins the trust or
friendship of the targeted person. Furthermore, it violates the Fifth
Amendment when the government prosecutor's conduct and overzealousness for
conviction, by any means, become outrageous. Due process requirements of the
Fifth amendment are often violated because representation is not properly made
by law enforcement officers that the proceeds of a financial transaction are
indeed from an "unlawful activity". The key words in the statute are that the
proceeds are "from some form, though necessarily which form" of unlawful
activity". Thus the word "representation" is downgraded to "any
representation" in the statute and it is further downgraded in the definitions
to "some form, though necessarily which form" of unlawful activity. This vague
wording is the source of prosecutorial abuse. It allows a very vague
representation and misunderstanding which violates the due process requirement
of the Fifth Amendment.
Sixth Amendment Violations: The statute violates the Sixth Amendment because
its language is ambiguous and vague and in most "sting" money laundering cases
a targeted person is not informed clearly in the money laundering indictment
of the nature and cause of the underlying offense. Frequently, neither
defendants nor juries understand the statutory tracking of the money
laundering charge or the fact that underlying offenses are used only for
"definitional" purposes. Also, in many "sting" money laundering cases a
defendant does not get a speedy trial as the sixth Amendment requires. In most
"sting" cases prosecutors deprive defendants of speedy trial with the excuse
that there is an ongoing investigation of the defendant for "other crimes"
revealed during the "sting". Often, the prosecutor will reindict a defendant,
adding more counts on a piecemeal basis, to avoid the speedy trial and to
simply coerce a defendant to "plea bargain".
Eighth Amendment Violations: The "sting" statute clearly violates the Eighth
Amendment, because it imposes excessive bail, excessive fines, and imposes
cruel and unusual punishment totally out of proportion to the underlying
offense. It provides for $500,000 in fines and up to 20 years imprisonment,
same as a major drug trafficking violation, even if the alleged,
misrepresented, underlying offense of the "sting" is only a petty misdemeanor.
Often the alleged unlawful activity does not fall within the predicate
offenses of section (7) of the law to qualify as a money laundering offense. A
circuitrous statutory tracking is often used to bring the alleged offense
within the ambit of money laundering offenses with considerable, unusual and
cruel escalation of the offense level.
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An Example of Money Laundering Law Misapplication.
The case of Dr.George Pararas-Carayannis presented in another section of this
page is an example of the frequent misapplications of the money laundering
laws. For unknown reasons, and in the absence of any ongoing criminal
activity, Dr. Pararas-Carayannis, an internationally recognized scientist, was
targeted for a money laundering "sting". The undercover government agent in
the "sting" was a young woman who was instructed by the prosecutor to befriend
Dr. Pararas-Carayannis and to ask him to process through his merchant account
a few credit card slips of her newly started "escort service" because she did
not, as yet, opened an account of her own. She claimed that she had the
necessary licences and that she was going to advertize in the Yellow Pages. No
other representation was ever made.
Dr. Pararas-Carayannis processed the slips through his account and gave the
young woman her money, deducting only for taxes and credit card company fees.
Subsequently he was charged by a federal prosecutor with "money laundering".
Although this had been a "sting" and there had been no real underlying
unlawful activity, the indictment charged him with the thought crime of
believing that in his own mind he was "disguising and concealing" proceeds of
"some form of unlawful activity" (even though there had been no such
representation). According to the indictment he was not charged with
committing or being a participant in any underlying unlawful activity (since
there was none). The prosecutor further claimed in court that the hypothetical
underlying offense needed not be represented nor proven for conviction. The
disclosure that the proceeds were from an escort service was enough, since
"everyone knows that escort services are fronts for prostitution".
Subsequent "plea-bargaining" efforts by the federal prosecutor to coerce Dr.
Pararas-Carayannis into a guilty plea before trial were clearly human rights'
violations. Because he refused to "plea bargain", the government attorney,
intentionally inflicted upon him unprecedented psychological torture through
unwarranted, continuous, retaliatory prosecutions, charging frivolous,
unsupported allegations - charges which could not be supported by facts or
evidence and which were subsequently dismissed. The single purpose of this
psychological/legal bulldozing was to break Dr. Pararas-Carayannis emotionally
and to coerce him to accept a guilty plea for the fabricated money laundering
charges of the"sting" scheme involving the proceeds (a few hundred dollars) of
the alleged unlawful activity - the non-existent, "escort" service. Allegedly
he netted $35 from this activity.
As a result of this unprecedented psychological torture and inhumane stress he
had been subjected, six weeks after the trial, Dr. Pararas-Carayannis suffered
a nearly fatal heart attack which resulted in his total disability and a
progressing heart failure. Yet, in spite of his dire health condition and
advanced age, he was subsequently sentenced to a total of 77 months for the
fabricated offense (41 months in prison and 36 months under court supervision.
This is in addition to seven years of supervised release he has already served
, making his total punishment for the fabricated "money laundering" offense
more than THIRTEEN (13) years. Clearly, this has been an outrageous
misapplication of the money laundering laws.
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Forfeiture Laws
An AACLJ member from Colorado provided us the following letter from the
Colorado Herald. This letter summarizes the effect of prevailing unreasonable
attitudes on allegedly fighting "crime" with forfeiture laws aimed primarily
at raising revenues for law enforcement agencies.
LETTER TO THE EDITOR: DURANGO, COLORADO HERALD, 25 JAN. 1996
Support Reform of Forfeiture Laws
Did you know that your money, savings and property can be seized by zealous
officials based on an informant's comment or weak circumstantial evidence -
all without trial or due process? Did you know that if you are caught carrying
significant cash and this money elicits a reaction from a drug-sniffing dog
that all the money can be confiscated?
This is especially alarming as more than 96 per cent of U.S. currency tests
positive for cocaine. This has already occurred in a number of cases.
Then, when charges have been dropped or you have been found not guilty, you
have to sue the government to get your property back. Good luck paying for
this when all your assets are gone. And, where are you and your family going
to live while this often two year process takes place?
The drug war craze has blended with politicians' tough-on-crime posturing to
create a nightmare.
In 1990 a Department of Justice bulletin sent to all U.S. attorneys:
"Significantly increasing forfeiture production to reach our budgeted targets.
Failure to achieve the $470 million projection would expose the Department's
forfeiture program to criticism. Every effort must be made to increase
forfeiture income ...."
Assistant Attorney General Edward Dennis advising U.S. attorneys: "To divert
personnel from other activities, including criminal cases, to prepare all
forfeiture cases for action ...."
In 1992, the California Committee on Public Safety: "Asset forfeiture is a
multi-million dollar source of revenue for law enforcement. Thus, there is an
incentive to seize property as a revenue source."
In addition, in 1993, a Los Angeles County deputy sheriff testified officers
stole $60 million in forfeited cash and property in 1988-89. A similar pattern
of activitv has been reported in New York and many other areas. And this was
six years ago.
If this is alarming to you, support the forfeiture Reform Bill (HR 1916) by
writing your representative. The bill is not ideal, but does begin to correct
the insanity.
Steve Self
Durango, Colorado
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