Criminal Defense of Immigrants


§ 19.77 W. Money Laundering

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The aggravated felony definition includes “an offense described in section 1956 of title 18, United States Code (relating to laundering of monetary instruments) or § 1957 of that title (relating to engaging in monetary transactions in property derived from specific unlawful activity) if the amount of the funds exceeded $10,000 . . . .”[830]  The elements of this category are:


(1)       a conviction of an offense;


(2)  described in 18 U.S.C. § 1956 (relating to laundering of monetary instruments) or § 1957 (relating to engaging in monetary transactions in property derived from specific unlawful activity);


                (3)  if the amount of the funds [laundered] exceeded $10,000.


A conviction of an unlisted federal statute should not constitute an aggravated felony under this category, and conviction of a violation of state law should not constitute an aggravated felony under this category, unless the state conviction as assessed by the record of conviction must fall within the essential substantive elements of one of the two listed federal offenses.  However, a court could read the “related to” language broadly to include offenses outside the scope of the listed federal statutes,[831] even though this language is included within a parenthetical similar to those other courts have described as descriptive, not limiting.  See § 16.37, supra.


The Ninth Circuit has held that the plain language of the money laundering aggravated felony definition requires that the amount of funds laundered must be $10,000 or more, rejecting the government’s argument that the loss the victim should be examined for the qualifying amount.[832]  For further discussion of the proof necessary to establish the $10,000 amount required to qualify an offense as an aggravated felony, see § 19.74, supra.


                A RICO offense carrying a potential sentence of one year also is an aggravated felony, under a separate section.[833]  Counsel should make sure that a money laundering or financial transaction offense is not a RICO offense.  If it is, avoiding the $10,000 limit will not prevent the conviction from being an aggravated felony.  Note that money laundering also constitutes a conduct-based ground of inadmissibility, where the government has reason to believe the noncitizen has engaged, or will engage in an offense described in 18 U.S.C. § § 1956 or 1957.[834]


                A money laundering conviction might also be considered a drug trafficking crime under some circumstances, or a fraud offense aggravated felony.  See § 19.73, supra.[835]

[830] INA § 101(a)(43)(D), 8 U.S.C. § 1101(a)(43)(D).

[831] See § 16.36, supra. 

[832] Chowdhury v. INS, 249 F.3d 970 (9th Cir. 2001).

[833] See INA § 101(a)(43)(J), 8 U.S.C. § 1101(a)(43)(J), and discussion infra.

[834] INA § 212(a)(2)(I), 8 U.S.C. § 1182(a)(2)(I).

[835] Lara-Chacon v. Ashcroft, 345 F.3d 1148 (9th Cir. Oct. 10, 2003) (BIA improperly relied upon presentence report in finding conviction for conspiracy to commit money laundering in violation of Ariz. Rev. Stat. § § 13-1003, 12-2317(A)(1), (C) was a drug trafficking crime where presentence report indicated respondent was a drug dealer and the offense involved 15 pounds of marijuana).



Cuellar v. United States, ___ U.S. ___, 128 S.Ct. 1994 (Jun. 2, 2008) (federal money laundering conviction, for international transportation of the proceeds of unlawful activity, under 18 U.S.C. 1956, reversed for lack of proof that the defendant did more than merely hide the money during its transport or did anything to create the appearance of legitimate wealth).

A conviction of money laundering, under 18 U.S.C. 1956, 1957, should not be considered a drug trafficking aggravated felony. It is certainly not a drug trafficking crime, under the second theory, since it cannot be considered a "felony punishable under the Controlled Substances Act (21 U.S.C. 801 et seq.), the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.), or Chapter 705 of Title 46." (18 U.S.C. 924(c)(2), referred to in INA 101(a)(43)(B), 8 U.S.C. 1101(a)(43)(B). As the Ninth Circuit held: "Lara-Chacon's conviction under the Arizona racketeering statute is not a 'drug trafficking crime' because his crime is not 'punishable under the Controlled Substances Act.'" Lara-Chacon v. Ashcroft, 345 F.3d 1148, 1152 (9th Cir. 2003).

The Ninth Circuit continued:

In assessing whether a crime is a drug trafficking crime, we consider categorically whether the "full range of conduct" encompassed by the statute of conviction is punishable by the Controlled Substances Act. United States v. Rivera-Sanchez, 247 F.3d 905, 907-09 (9th Cir.2001) (en banc). The money laundering statute under which Lara-Chacon was convicted penalizes many different types of racketeering that are not punishable by the Controlled Substances Act, which makes it illegal to "use or invest, directly or indirectly, any part of such income[derived from committing any prohibited drug offense punishable by more than one year], or the proceeds of such income." See 21 U.S.C. 854. The Arizona statute under which Lara Chacon was convicted defines money laundering as follows: "A person is guilty of money laundering in the second degree who: 1. Acquires or maintains an interest in, transacts, transfers, transports, receives or conceals the existence or nature of racketeering proceeds knowing or having reason to know that they are the proceeds of an offense." Ariz.Rev.Stat. 13-2317(A)(1) (West 1999). In addition to acts for financial gain "involving ... prohibited drugs, marijuana, or other prohibited*1153 chemicals or substances," racketeering under Arizona law includes acts involving theft, asserting false claims, obscenity, a scheme or artifice to defraud, prostitution, terrorism, drug crimes punishable for less than one year, and counterfeiting, among others. Ariz.Rev.Stat. 13-2301(D)(4) (West 1999). Thus, the "full range of conduct" encompassed by the Arizona statute is not punishable by the Controlled Substances Act, which, for example, does not address terrorism, prostitution, theft, drug crimes punishable for less than a year, or obscenity. We therefore turn to the modified categorical approach.

(Id. at 1152-1153.)

A money-laundering conviction could therefore only be a drug trafficking aggravated felony if it was included within the plain language of the definition: "illicit trafficking in a controlled substance . . . ." (Ibid.) Standing alone, a financial transaction involving drug-trafficking proceeds does not appear to fall within this definition, since no federally defined controlled substances are exchanged in the money laundering transaction itself. In Lara-Chacon v. Ashcroft, 345 F.3d 1148, 1154 (9th Cir. 2003), a conviction under a state money-laundering statute was found not to be a drug-trafficking aggravated felony, but in that case the government only had a PSR which was not admissible under the modified categorical approach. Logically, financial transactions involving the proceeds of a sale of drugs are distinguishable from the drug transaction itself, and so should not fall under the "illicit trafficking" portion of the drug trafficking aggravated felony definition.