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Money laundering convictions require proof of intent

On Behalf of | Aug 26, 2019 | Criminal Defense

Shell companies and foreign bank accounts are two of the ways that someone in Texas may attempt to conceal the source of certain finances. This process, known as money laundering, is illegal, widespread and difficult to prove.

Cornell University Law School’s Legal Information Institute notes that federal law 18 U.S. Code § 1956 describes the ways that people could use financial transactions to conceal their illegal financial activities, as well as the purposes for it. The reason for the deception could be to cover the source of the money, but it could also be to avoid paying taxes on money earned legitimately. The purpose of money laundering could also be to hide the identity of the owner of the money or to move the money from the U.S. to a foreign country.

Money laundering is difficult to uncover, and it is also difficult to prove. As The National Law Review explains, the federal government must prove intent. Cited as an example, one case involved a husband and wife who authorities claimed were a team. Their activities seemed to prove their collaboration on the money laundering scheme, as the wife not only served as a registered agent of the fraudulent company the husband set up, but she was also co-founder and signatory.

While the wife’s role as accomplice may have appeared certain, the judge disagreed. The U.S. District Court determined that there was not conclusive evidence that the wife helped to develop the scheme, create the promotional materials for it or distribute them. In fact, there was no proof that the wife even understood that the husband’s activities were a money-laundering scheme rather than a legitimate business.

Because there was no evidence that the wife had the intent to commit fraud, the court vacated the guilty verdict against her.