Grassley Works to Close Loopholes in Money Laundering Statutes Print
News Releases - Business, Economy & Finance
Written by Grassley Press   
Tuesday, 25 October 2011 10:49

Tuesday, October 18, 2011

WASHINGTON – Senate Judiciary Committee Ranking Member Chuck Grassley today introduced comprehensive legislation that will strengthen money laundering statutes and will make it more difficult for terrorists, drug traffickers and other criminal organizations to finance their operations by using loopholes to easily transfer money around the world.  Grassley introduced the bill with Senator Dianne Feinstein of California.

“Every day there are terrorists and criminals who are looking for new ways to move their funding operations and evade authorities.  Our laws must keep pace with the new and emerging trends these people exploit to fund their endeavors,” Grassley said. “We have to hit them where it hurts most, in their pocketbooks, and we can’t do this if we do not give our law enforcement agencies the tools they need to stop the flow of illicit money.”

Grassley said his bill fixes one of the most egregious money laundering loopholes that allows prepaid access cards, or cash cards, to cross international borders without facing any scrutiny.  For example, criminals can put thousands or even millions of dollars on these cards, and not have to declare it as they cross the border.  Grassley’s legislation would require the cards to be reported to border authorities if the card holds more than $10,000.

In addition, the bill addresses concerns that bulk cash smugglers continue to use loopholes in federal laws to evade prosecution.  The bill also works to fix procedural and definitional problems to combat money laundering, such as dealing with comingled funds, prosecutors being able to charge money laundering as a course of conduct, allowing wiretaps as an investigative tool for money laundering cases, and reverse money laundering operations.

It also addresses the Supreme Court decision in Cuellar v. United States, which created a loophole in the bulk cash smuggling statute, by incorporating a recommendation the Supreme Court proposed to ensure that drug smugglers are not allowed to break the law without consequence simply by evading knowing the full plan of the smuggling operation.

Here are the major points of the legislation.

  • Simplifies the predicate offenses that give rise to money laundering offenses,
  • Makes it a crime to participate in “reverse money laundering,” or knowingly transporting money or goods used or meant to be used in money laundering,
  • Removes inconsistent language that created an ambiguity as to whether a defendant had to have knowledge that funds were involved in illegal activity in general or a particular type of criminal activity,
  • Strikes the requirement that the government prove a defendant knew the purpose and plan behind transportation of laundered money, closing a loophole that allows mules to transport laundered money or goods with impunity,
  • Makes prepaid access devices, such as stored value cards, subject to anti-money laundering reporting requirements,
  • Fixes the ambiguity of how to treat the commingling funds and clarifies that a case can aggregate a series of closely related transactions under the $10,000 threshold to meet the requirement of $10,000 in criminally-derived property,
  • Adds a definition of “money transmitting business” to clarify that it applies to more than just storefront businesses.
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