Establishes certain offenses relating to structuring and money laundering

Summary of specific provisions

Section 1 amends section 470.00 of the penal law by adding three new subdivisions 11, 12, and 13. Subdivision 11 defines the term "structures" for the purposes of sections 470.30 and 470.31 of the penal law. Subdivision 12 defines the term "monetary transaction". Subdivision 13 defines the term "property derived from specified criminal conduct".

Section 2 adds four new sections to the penal law: 470.30, 470.31, 470.32, and 470.33. Section 470.30 establishes the crime of structuring in the second degree, and provides that it shall be considered a class E felony. Section 470.31 establishes the crime of structuring in the first degree, and provides that it shall be a class D felony. Section 470.32 establishes the crime of criminal monetary transaction in the second degree, and provides that it shall be a class E felony. Section 470.33 establishes the crime of criminal monetary transaction in the first degree, and provides that it shall be a class D felony.

Section 3 amends subdivision 3 of section 470.03 of the penal law to provide that monetary transactions may be considered together and the value of the property derived from specified criminal conduct may be aggregated, provided that the monetary transactions are all part of a single "criminal transaction" as defined in subdivision two of section 40.10 of the criminal procedure law. It also provides that nothing in section 470.32 or section 470.33 shall make it unlawful to return funds held in escrow, under certain conditions.

Section 4 amends section 470.25 of the penal law to add criminal monetary transactions to the section on money laundering and fines and provides a fine structure for persons convicted of a criminal monetary transaction.

Section 5 amends paragraph (a) of subdivision 1 of section 460.10 of the penal law to add structuring and money laundering.

Section 6 provides that the act shall take effect on the first of November next succeeding the date upon which this act shall have become a law.

Justification

This legislation is necessary to provide law enforcement with a tool to prosecute those who attempt to evade federal reporting requirements by making deposits in amounts just under the minimum threshold of

$10,000 required for banks to file a currency transaction report. This is a strategy often employed by money launderers and tax evaders to avoid scrutiny of their funds.

According to a report released by the New York State White Collar Crime Task Force, "prosecutors would often be able to show the intent to evade a filing requirement... but it is usually quite difficult under current law to prove that a defendant who structures transactions also intended to commit an existing penal offense, such as tax fraud or money laundering, sufficient to charge them as an accomplice or co-conspirator."

This legislation creates the crime of "structuring", which would allow prosecutors to charge a person with structuring deposits to avoid reporting requirements without the burden of proof that a defendant had committed further crimes.

This legislation also creates the crime of "criminal monetary transaction", which, according to the New York State White Collar Crime Task Force report, would prohibit large-scale transactions knowingly involving "criminally derived property". This would cover the individuals who knowingly committed a crime and then spent money gained through criminal activity in a transaction, and would also cover "merchants and financial institutions that knowingly receive tainted funds in the course of ordinary commercial activity", as long as the transaction is in excess of $10,000.

Prior legislative history

New Legislation.

Fiscal implications

None to the state.

Effective date

Section 6 provides that the act shall take effect on the first of November next succeeding the date upon which this act shall have become a law.