Money laundering is a serious crime in which “dirty earnings,” or funds earned through criminal activities, are funneled into an operation that seems legitimate in order to “wash” the cash for mainstream use. From a legal perspective, cases of money laundering aren’t always cut-and-dry, especially to individuals or companies who feel they’ve been wrongfully accused.
Take the recent case of Dallas-based Elemetals. Elemetals is a precious metals company that develops business models catering to the entirety of the precious-metals process, from attaining raw material to acquiring finished products. After over a decade in business, the company received a $15 million fine in money laundering activities related to gold. Here’s how it went down.
Special Obligations Under Money Laundering Rules
While Elemetals was not named as the engine behind the scheme, the company found itself in hot water for failing to establish an anti-money laundering program. According to the Miami Herald — one of the “guilty” Elemetals locations was in Doral — the company violated a Bank Secrecy Act law when it “willfully failed to develop, implement and maintain an [anti-money-laundering program] reasonably designed to prevent Elemetal from being used to facilitate money laundering and the financing of terrorist activities.”
In other words, Elemetals wasn’t technically doing the money laundering, but it was responsible for it because it had an obligation to discourage such activities given the unique nature of their business. Some companies, especially those dealing internationally, may be “guilty” and not even aware of it!
Fortunately for Elemetals, $10 million of the fine likely will be satisfied when the company gets the Peruvian government to sign off on and keep a yet-to-be-received shipment. The forfeiture will leave a fine of $4 million as prosecutors and Elemetals’ attorneys agree the company has satisfied $1 million of the debt.
Know Your Options
As bad as it is for Elemetals, their case could have turned out much worse. Fortunately for them, they were able to mitigate the damages through forfeitures and a willingness to comply with implementation and development of an anti-money laundering program. They also were able to unload enough assets to satisfy 20% of the remaining balance.
But a $4 million fine in any business is seismic, and whether the company is able to survive is anyone’s guess. If you’re accused of money laundering, here are three defenses you may wish to consider:
- The crime was committed under duress. You can prove someone else forced you to do it under direct or implied direct threat.
- There isn’t enough evidence to prove the alleged money laundering came from an illegal activity that you committed.
- You did not have the intent to commit a crime. Think accountants, bankers, and other people who deal with large quantities of money. They may be “moving” the money without realizing the criminal nature behind it.
While all these strategies can be effective, nothing works if you have inferior representation. John Teakell has defended many cases like these throughout his 25+ years as an attorney. He’s worked on the prosecution and defense sides and can view a case at both angles to develop the best possible strategy. If you need help with your defense, give him a call or reach out online today.
[Featured Image via Flickr Creative Commons]