A decade ago, the RICO statute was one of the most feared, powerful weapons in the prosecutor's arsenal. Ordinary crimes, chargeable in some cases only on the state level, could be charged as predicate acts under RICO and easily transformed into 20-year counts. Wholesale forfeitures of any properties used in the criminal enterprise were the government's for the asking. Those were dark days for our civil liberties and for the defense bar. But we took some solace in RICO's being restricted to those engaged in a "pattern" of racketeering, and in our right to visit the RICO desk in Washington to try to head off unwarranted prosecutions.
Now there's a new weapon in the prosecutor's stockpile -- even more deadly than RICO -- whose use is limited only by the prosecutor's imagination. I am referring to the money laundering statutes, principally 18 U.S.C. 1956 and 1957. Extraordinarily high Sentencing Guideline levels apply to all such violations without regard to the underlying criminal conduct giving rise to the money laundering activity. And, the criminal and civil forfeiture provisions in these statutes are the most overbroad and abused of the forfeiture laws.
The law passed in 1986 to "combat organized crime and drug syndicates" is today applied to cases barely recognizable as what was intended. A violation of virtually any federal statute, and a host of state ones that involves the generation of proceeds (and what non-violent crime doesn't?), can be converted into the crime of money laundering as soon as the defendant engages in a "financial transaction" with the money. Whether the "financial transaction" is isolated from or incidental to the underlying crime makes no difference. A financial transaction can be as simple as depositing the money in a bank account, or buying a loaf of bread and a quart of milk!
The sentences for money laundering offenses are disproportionately high in relation to the sentence one would have received if charged with the actual predicate activity. This imbalance has led prosecutors to charge money laundering for improper reasons -- e.g., coercing a plea; punitively enhancing the sentence; and obtaining forfeiture under the money laundering laws when no forfeiture would be available were the individual only charged with the predicate crime.
Horror stories abound. For example, a licensed food stamp vendor deposits food stamps in his bank account, which were purchased at a discount from vendors who accepted the stamps, but who were not authorized to do so. If the individual is prosecuted for illegal food stamp trafficking in violation of 7 U.S.C. 2024(b), his base offense level is 6, and he is eligible for probation. But by charging the defendant with money laundering, his base offense level is at least 20 and several years imprisonment is required.
A recent Sentencing Commission study (September 1997) covers the two years since Congress hastily rejected proposals to adjust the money laundering guidelines to better conform to the levels set for the underlying criminal activity. The study concludes that money laundering sentences are still being sought and imposed "where the money laundering conduct is so attenuated as to be virtually unrecognizable as the type of conduct for which the money laundering sentencing guidelines were drafted." The Commission urges DOJ to curb its excesses -- and ensure that such prosecutions not be brought unless the money laundering conduct presents "additional societal harm sufficient to merit substantially more severe sanctions than those appropriate for the underlying offense from which the illicit funds were generated."
While DOJ has established a Money Laundering Section, in combination with approval and consultation guidelines (which pertain to a very limited class of cases), this has had little ameliorative effect. The obligation to consult with the Money Laundering Section, to the extent that it is adhered to at all (most AUSAs honor it in the breach) is only consultative. In most cases, even if the Money Laundering Section advises against prosecution, the AUSA is still free to proceed.
Indeed, as Legislative Director Leslie Hagin says in her column (page 68), things may be getting worse. The DOJ Office of Asset Forfeiture and Money Laundering has prevailed upon House Judiciary Crime Subcommittee Chairman Bill McCollum (R-FL) to move a new bill to expand the list of money laundering "predicate acts" (especially into computer industry and firearms industry matters, and into any entity's alleged violation of the Clean Air Act). The bill will radically broaden the scope of the money laundering forfeiture -- already the most overbroad and abused forfeiture provisions. It also eviscerates the uniform rules of evidence and civil procedure, to allow the government especially unfair discovery and evidence "advantages" in civil forfeiture cases. This new bill, H.R. 3745, is largely a civil asset forfeiture bill, at odds with the efforts of Chairman Henry Hyde (R-IL) and other leaders of the House Judiciary Committee, to reform existing laws and rein in abuses.
Alas, even the Sentencing Commission is growing timid. Its most recent proposed amendments, sent to Congress do not include any revisions relating to money laundering.
We in the criminal defense bar have a duty to cry out against excessively harsh money laundering sentencing and forfeiture provisions, and about the abuse of power in too many of these prosecutions. If you know of such cases, share them with the Commission and with your legislators. Urge them to support legislation to limit money laundering prosecutions to appropriate cases, and to ameliorate the unduly harsh guidelines now in effect. Tell them to oppose H. R. 3745.
Capitol Hill can be sensitive to citizen complaints about over-zealous law enforcement efforts -- witness the recent crackdown on the IRS. Let's get the fight going.