NACDL - Proving Money Laundering Beyond a Reasonable Doubt: The Problem of Commingled Property Under 18 USC

Proving Money Laundering Beyond a Reasonable Doubt: The Problem of Commingled Property Under 18 USC

When the government charges a defendant pursuant to 18 U.S.C. § 1957, that individual is accused of knowingly engaging or attempting to engage in a transaction involving more than $10,000 of criminally derived property. Such a defendant is often engaged in a legitimate business and may (or may not) have engaged in isolated instances of criminal conduct. For example, consider charges against a grocery store owner accused of supplementing profits by paying cash for food stamps. As a result, the defendant’s property is “commingled,” i.e., some funds are “clean” and some are “tainted.” When a defendant uses commingled funds in a charged monetary transaction, at what point does the government prove that the transaction involved criminally derived property (tainted funds) of a value greater than $10,000? Some courts presume that tainted money was spent first. Other courts presume that the defendant spent clean funds if the defendant’s account contained sufficient clean funds to cover the transaction. Until the U.S. Supreme Court settles the issue, the authors say practitioners should object and resist any application of the presumption that the defendant spent tainted funds first. Practitioners should advance the position that the government must prove beyond a reasonable doubt that each charged monetary transaction contained more than $10,000 of criminally derived property.