The Criminalization of Money Laundering
In a significant legislative move, North Carolina has enacted a new anti-money laundering law aimed at curbing financial crimes. The law, encapsulated in House Bill 495, outlines stringent measures and penalties for individuals and organizations involved in money laundering activities. On June 28, 2024, the Governor of North Carolina signed the bill into law, which is different than the seldom used Racketeer Influenced and Corrupt Organizations Act. At Harkey Litigation, we recognize the importance of understanding these legal changes, especially for those who may be affected. Here’s a comprehensive breakdown of what you need to know.
Anti-Money Laundering Law: Key Provision
The law, N.C. Gen. Stat. § 14-118.8, defines money laundering as knowingly and willfully engaging in various activities involving proceeds from criminal activity or funds exceeding $10,000. These activities include:
- Acquiring, maintaining, concealing, possessing, transferring, or transporting the proceeds of criminal activity.
- Conducting, supervising, or facilitating transactions involving criminal proceeds.
- Investing, expending, receiving, or offering to engage with criminal proceeds.
- Financing or investing in activities intended to further criminal conduct.
- Using or attempting to use criminal proceeds to disguise their nature, location, source, ownership, or control.
- Using criminal proceeds to promote further criminal activity.
- Conducting transactions to avoid federal transaction reporting requirements.
Culpable Mental State
To be convicted of money laundering under this law, it must be established that the accused had knowledge of the criminal activity generating the proceeds. This requirement ensures that accidental involvement without knowledge of the criminal origin of the funds is not penalized.
Legal Defenses
A notable defense under this law is if the accused can demonstrate that their actions were intended to facilitate the lawful seizure, forfeiture, or disposition of the funds for legitimate law enforcement purposes. Remember, it is the State’s burden to prove every element of the charge beyond a reasonable doubt. Here are some other legal defenses that may help in a North Carolina anti-money laundering case:
- Lack of knowledge of the nature of the criminal activity.
- Failure of the government to show the required amount of funds at issue exceeds $10,000.
- Failure of the government to show the required alleged amount in the criminal charge.
- Vagueness and ambiguity in the language of the criminal statute.
Punishment for Money Laundering in North Carolina
The law categorizes penalties based on the value of the funds involved. The table below outlines the felony punishment classification and minimum sentences based on the amount of laundered proceeds.
| Laundered Amount | Punishment Class | Minimum Sentences |
| Proceeds of funds less than $100,000 | Class H Felony | I/A 16-20 13-16 10-13 |
| Proceeds of funds more than $100,000 | Class C Felony | A 73-92 58-73 44 -58 |
Forfeiture and Aggregation
All property associated with money laundering offenses is subject to forfeiture. Additionally, if the proceeds stem from a continuous scheme or multiple sources, the total value can be aggregated to determine the severity of the offense.
Multiple Offenses and Conspiracy
Each violation of the law is treated as a separate offense. Conspiring to commit money laundering is punishable under the same provisions, even if the accused engages in a conspiracy with a law enforcement officers who is acting in an undercover capacity.
Venue and Protection from Liability
Violations occurring across different counties can be prosecuted in any county where part of the violation occurred. Financial institutions acting in good faith in accordance with the law are protected from civil liability.
Implications for Individuals and Organizations
This new legislation underscores the importance of vigilance and compliance in financial transactions. Individuals and organizations must ensure their activities do not inadvertently involve criminal proceeds. At Harkey Litigation, we are committed to providing robust legal defense and guidance to those impacted by these stringent measures.
Conclusion
North Carolina’s new anti-money laundering law represents a robust effort to combat financial crimes. However, the poorly drafted language of this criminal statute creates significant weaknesses and vulnerabilities for the prosecution. Understanding the nuances of this legislation is crucial for anyone engaged in financial transactions or who is accused of money laundering. Should you find yourself or your organization under scrutiny for potential money laundering activities, Harkey Litigation is here to offer legal advice and a strategically aggressive defense. We are dedicated to protecting your rights and ensuring you navigate these legal complexities with confidence.
About the Author: W. Scott Harkey is a white-collar criminal defense lawyer in Winston-Salem, North Carolina. He is a board certified specialist in North Carolina criminal law. Prior to opening Harkey Litigation, Harkey marshaled North Carolina’s Financial Crimes Unit as the Senior Financial Crimes Special Prosecutor. He has handled thousands of white-collar criminal matters throughout North Carolina and some of the most notable cases in modern North Carolina history.
