New Jersey Money Laundering

New Jersey Money Laundering

Money Laundering is a crime that can either be prosecuted as a State crime in New Jersey Superior Courts or a Federal crime in the Federal District Court.

Money laundering is the process of disguising the source of property obtained through illegal activity by channeling it through legitimate business. In New Jersey, several types of conduct constitute money laundering:

  • Possessing property that a reasonable person would know to be derived from illegal activity
  • Entering a transaction involving such property knowing that the purpose of the transaction is to disguise the source of the property or avoid federal or state reporting requirements
  • Preventing a financial institution from filing a report required by state or federal law or causing such an institution to file a report containing material omissions or false facts

New Jersey Money Laundering Penalties

Money laundering is a serious crime under both New Jersey and federal law. In New Jersey, the severity of a money laundering crime usually depends on the value of the property involved:

  • $500,000 or more: First-degree crime carrying a sentence of 10 to 20 years in prison
  • $75,000 to $499,000: Second-degree crime carrying a sentence of 5 to 10 years in prison
  • Less than $75,000: Third-degree crime carrying a sentence of 3 to 5 years in prison
  • Obstructing a legally required report from a financial institution: Third-degree crime carrying a sentence of 3 to 5 years in prison

New Jersey Money Laundering Statute

N.J.S.A. 2C:21-25. Money laundering and illegal investment; crime

A person is guilty of a crime if the person:

a. transports or possesses property known or which a reasonable person would believe to be derived from criminal activity; or

b. engages in a transaction involving property known or which a reasonable person would believe to be derived from criminal activity

(1) with the intent to facilitate or promote the criminal activity; or

(2) knowing that the transaction is designed in whole or in part:

(a) to conceal or disguise the nature, location, source, ownership or control of the property derived from criminal activity; or

(b) to avoid a transaction reporting requirement under the laws of this State or any other state or of the United States; or

c. directs, organizes, finances, plans, manages, supervises, or controls the transportation of or transactions in property known or which a reasonable person would believe to be derived from criminal activity.

d. For the purposes of this act, property is known to be derived from criminal activity if the person knows that the property involved represents proceeds from some form, though not necessarily which form, of criminal activity. Among the factors that the finder of fact may consider in determining that a transaction has been designed to avoid a transaction reporting requirement shall be whether the person, acting alone or with others, conducted one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner. The phrase “in any manner” includes the breaking down of a single sum of currency exceeding the transaction reporting requirement into smaller sums, including sums at or below the transaction reporting requirement, or the conduct of a transaction, or series of currency transactions, including transactions at or below the transaction reporting requirement. The transaction or transactions need not exceed the transaction reporting threshold at any single financial institution on any single day in order to demonstrate a violation of subparagraph (b) of paragraph (2) of subsection b. of this section.

e. A person is guilty of a crime if, with the purpose to evade a transaction reporting requirement of this State or of 31 U.S.C. § 5311 et seq. or 31 C.F.R. § 103 et seq., or any rules or regulations adopted under those chapters and sections, he:

(1) causes or attempts to cause a financial institution, including a foreign or domestic money transmitter or an authorized delegate thereof, casino, check casher, person engaged in a trade or business or any other individual or entity required by State or federal law to file a report regarding currency transactions or suspicious transactions to fail to file a report; or

(2) causes or attempts to cause a financial institution, including a foreign or domestic money transmitter or an authorized delegate thereof, casino, check casher, person engaged in a trade or business or any other individual or entity required by State or federal law to file a report regarding currency transactions or suspicious transactions to file a report that contains a material omission or misstatement of fact; or

(3) structures or assists in structuring, or attempts to structure or assist in structuring any transaction with one or more financial institutions, including foreign or domestic money transmitters or an authorized delegate thereof, casinos, check cashers, persons engaged in a trade or business or any other individuals or entities required by State or federal law to file a report regarding currency transactions or suspicious transactions. “Structure” or “structuring” means that a person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading currency transaction reporting requirements provided by State or federal law. “In any manner” includes, but is not limited to, the breaking down into smaller sums of a single sum of currency meeting or exceeding that which is necessary to trigger a currency reporting requirement or the conduct of a transaction, or series of currency transactions, at or below the reporting requirement. The transaction or transactions need not exceed the reporting threshold at any single financial institution on any single day in order to meet the definition of “structure” or “structuring” provided in this paragraph.

CREDIT(S)

L.1994, c. 121, § 3, eff. Oct. 26, 1994. Amended by L.1999, c. 25, § 3, eff. Feb. 16, 1999; L.2002, c. 26, § 14, eff. June 18, 2002.

2C:21-27. Degrees of offense; penalties; nonmerger

a. The offense defined in subsections a. b. and c. of section 3 of P.L. 1994, c. 121 (C.2C:21-25) constitutes a crime of the first degree if the amount involved is $500,000.00 or more. If the amount involved is at least $75,000.00 but less than $500,000.00 the offense constitutes a crime of the second degree; otherwise, the offense constitutes a crime of the third degree. The offense defined in subsection e. of section 3 of P.L.1994, c. 121 (C.2C:21-25) constitutes a crime of the third degree. Notwithstanding the provisions of N.J.S.2C:43-3, the court may also impose a fine up to $500,000.00. The amount involved in a prosecution for violation of this section shall be determined by the trier of fact. Amounts involved in transactions conducted pursuant to one scheme or course of conduct may be aggregated in determining the degree of the offense. Notwithstanding the provisions of paragraph (1) of subsection a. of N.J.S.2C:43-6, a person convicted of a crime of the first degree pursuant to the provisions of this subsection shall be sentenced to a term of imprisonment that shall include the imposition of a minimum term which shall be fixed at, or between, one-third and one-half of the sentence imposed, during which time the defendant shall not be eligible for parole.

b. In addition to any other dispositions authorized by this Title, upon conviction of a violation of this section, the court may sentence the defendant to pay an amount as calculated pursuant to subsection a. of section 6 of P.L.1994, c. 121 (C.2C:21-28).

c. Notwithstanding N.J.S.2C:1-8 or any other provision of law, a conviction of an offense defined in this section shall not merge with the conviction of any other offense constituting the criminal activity involved or from which the property was derived, and a conviction of any offense constituting the criminal activity involved or from which the property was derived shall not merge with a conviction of an offense defined in section 3 of P.L.1994, c. 121 (C.2C:21-25), and the sentence imposed upon a conviction of any offense defined in section 3 of P.L.1994, c. 121 (C.2C:21-25) shall be ordered to be served consecutively to that imposed for a conviction of any offense constituting the criminal activity involved or from which the property was derived. Nothing in P.L.1994, c. 121 (C.2C:21-23 et seq.) shall be construed in any way to preclude or limit a prosecution or conviction for any other offense defined in this Title or any other criminal law of this State.

CREDIT(S)

L.1994, c. 121, § 5, eff. Oct. 26, 1994. Amended by L.1999, c. 25, § 4, eff. Feb. 16, 1999; L.2002, c. 26, § 15, eff. June 18, 2002.

2C:21-27.1. Criteria for imposition of anti-money laundering profiteering penalty

In addition to any other disposition authorized by this title, including but not limited to any fines which may be imposed pursuant to the provisions of N.J.S.2C:43-3, where a person has been convicted of a crime defined in P.L.1994, c. 121 (C.2C:21-23 et seq.) or an attempt or conspiracy to commit such a crime, the court shall, upon the application of the prosecutor, sentence the person to pay a monetary penalty in an amount determined pursuant to section 9 of P.L.1999, c. 25 (C.2C:21-27.2), provided the court finds at a hearing, which may occur at the time of sentencing, that the prosecutor has established by a preponderance of the evidence that the defendant was convicted of a violation of P.L.1994, c. 121 (C.2C:21-23 et seq.).

CREDIT(S)

L.1999, c. 25, § 8, eff. Feb. 16, 1999.

2C:21-27.2. Calculation of anti-money laundering profiteering penalty

Where, pursuant to section 8 of P.L.1999, c. 25 (C.2C:21-27.1) the prosecutor has established by a preponderance of the evidence that the defendant was convicted of a violation of P.L.1994, c. 121 (C.2C:21-23 et seq.), the court shall assess a monetary penalty as follows:

a. $500,000.00 in the case of a crime of the first degree; $250,000.00 in the case of a crime of the second degree; $75,000.00 in the case of a crime of the third degree; or

b. an amount equal to three times the value of any property involved in a money laundering activity in violation of P.L.1994, c. 121 (C.2C:21-23 et seq.).

c. Where the prosecution requests that the court assess a penalty in an amount calculated pursuant to subsection b. of this section, the prosecutor shall have the burden of establishing by a preponderance of the evidence the appropriate amount of the penalty to be assessed pursuant to that subsection. In making its finding, the court shall take judicial notice of any evidence, testimony or information adduced at trial, plea hearing or other court proceedings and shall also consider the presentence report and other relevant information, including expert opinion in the form of live testimony or by affidavit. The court’s findings shall be incorporated in the record, and such findings shall not be subject to modification by an appellate court except upon a showing that the finding was totally lacking support in the record or was arbitrary and capricious.

CREDIT(S)

L.1999, c. 25, § 9, eff. Feb. 16, 1999.

2C:21-27.4. Payment schedule

The court may, for good cause shown, and subject to the provisions of this section, grant permission for the payment of an anti-money laundering profiteering penalty assessed pursuant to section 9 of P.L.1999, c. 25 (C.2C:21-27.2) to be made within a specified period of time or in specified installments, provided however that the payment schedule fixed by the court shall require the defendant to pay the anti-money laundering profiteering penalty in the shortest period of time consistent with the nature and extent of his assets and his ability to pay, and further provided that the prosecutor shall be afforded the opportunity to present evidence or information concerning the nature, extent and location of the defendant’s assets or interests in property which are or might be subject to levy and execution. In such event, the court may only grant permission for the payment to be made within a specified period of time or installments with respect to that portion of the assessed penalty which would not be satisfied by the liquidation of property which is or may be subject to levy and execution, unless the court finds that the immediate liquidation of such property would result in undue hardship to innocent persons. If no permission to make payment within a specified period of time or in installments is embodied in the sentence, the entire penalty shall be payable forthwith.

CREDIT(S)

L.1999, c. 25, § 11, eff. Feb. 16, 1999.

2C:21-27.5. Relation to other dispositions

a. An anti-money laundering profiteering penalty assessed pursuant to section 9 of P.L.1999, c. 25 (C.2C:21-27.2) shall be imposed and paid in addition to any penalty, fine, fee or order for restitution which may be imposed.

b. An anti-money laundering profiteering penalty imposed pursuant to section 9 of P.L.1999, c. 25 (C.2C:21-27.2) shall be in addition to and not in lieu of any forfeiture or other cause of action instituted pursuant to chapter 41 or 64 of Title 2C of the New Jersey Statutes, and nothing in this chapter shall be construed in any way to preclude, preempt or limit any such cause of action. A defendant shall not be entitled to receive credit toward the payment of an anti-money laundering profiteering penalty imposed pursuant to section 9 of P.L.1999, c. 25 (C.2C:21-27.2) for the value of property forfeited, or subject to forfeiture, pursuant to the provisions of chapter 41 or 64 of Title 2C of the New Jersey Statutes.

CREDIT(S)

L.1999, c. 25, § 12, eff. Feb. 16, 1999.

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