Relates to violations by unlicensed transmitters of money

BILL NUMBER:S2931

Title of bill

An act to amend the banking law, in relation to violations by unlicensed transmitters of money

Purpose

To raise the criminal penalties for unlicensed money transmit- ter activities in those situations where the person knows that the funds involved are the proceeds of criminal conduct

Summary of provisions

This bill amends Section 650(2) of the Banking Law to separate the current Class E felony penalties for the unlicensed transmission of money into two categories: 1) the existing violation regarding the unlicensed transmission of funds in excess of a specified threshold would continue to be a Class E felony; and 2) the existing violation regarding the unlicensed transmission of funds where the tran- smitter knows that such funds are the proceeds of any criminal conduct would be raised from a Class E felony to a Class D felony.

Justification

This bill would increase the criminal penalties for the unlicensed transmission of money in certain situations. The existing penalties were set in 1990. Under that law, it is a Class A misdemeanor to operate as an unlicensed money transmitter, with the penalty rising to a Class E felony if the transmitter either transmits more than a specified threshold amount or transmits money knowing that it is the proceeds of any criminal conduct.

It is important to have appropriate and significant penalties in order to help deter crime and to appropriately punish those who commit such crimes. There continues to be much attention at both the national and state levels to possible abuses involving money transmitters. In addi- tion to the potential for consumer fraud, illegal money transmitters are often involved in laundering the proceeds of criminal activity. Some federal investigations have even focused on the use of money transmit- ters to launder funds in support of terrorist activities.

The regulation of the money transmission industry is important for protecting consumers and preventing criminal activities. Unlicensed transmitters seek to evade the regulatory system and are likely to be involved in such illegal activities. It is appropriate to target with higher penalties those illegal operators who are helping to facilitate criminal activities through the laundering of criminal proceeds.

Fiscal implications

None

Effective date

This act shall take effect on the sixtieth day after it shall have become law