Penal Code 186.10 PC - Money Laundering in California
California Penal Code 186.10 PC defines the crime of money laundering, often associated with drug-related offenses. This crime occurs when money obtained from illegal or criminal activity is channeled into bank accounts or other sources that make the funds untraceable.
The crime of money laundering is a "wobbler," a term used in California law to describe offenses that can be charged as either a misdemeanor or a felony.
The decision on how to charge the offense is often based on the circumstances of the case, the defendant's criminal history, and the amount of money involved. Notably, money laundering is often prosecuted as a federal crime, especially when the illegal money crosses state lines or involves financial institutions insured by the federal government.
California's PC 186.10 statute criminalizes money laundering. If convicted, the penalties are severe, including up to 5 years in prison. This significant penalty underscores the serious nature of this crime and should serve as a stark reminder of the potential consequences.
As noted, the punishments imposed by the sentencing judge will depend on the total amount of money transacted, further emphasizing the gravity of the situation.
PC 186.10 says, "(a) Any person who conducts or attempts to conduct a transaction or more than one transaction within seven days involving a monetary instrument or instruments of a total value exceeding five thousand dollars ($5,000), or a total value exceeding twenty-five thousand dollars ($25,000) within 30 days, through one or more financial institutions-
(1) with the specific intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on of any criminal activity, or
(2) knowing that the monetary instrument represents the proceeds of, or is derived directly or indirectly from the proceeds of, criminal activity, is guilty of the crime of money laundering.
The aggregation periods do not obligate financial institutions to record, report, create, or implement tracking systems or otherwise monitor transactions involving monetary instruments at any time.
In consideration of the constitutional right to counsel afforded by the Sixth Amendment to the United States Constitution and Section 15 of Article I of the California Constitution, when a case involves an attorney who accepts a fee for representing a client in a criminal investigation or proceeding, the prosecution shall additionally be required to prove that the monetary instrument was accepted by the attorney with the intent to disguise or aid in disguising the source of the funds or the nature of the criminal activity."
What is "Money Laundering"
As noted, Penal Code 186.10 PC defines money laundering as "the act of conducting or attempting to conduct a transaction through a financial institution with the knowledge that the funds involved are derived from illegal activities or for the purpose of promoting and furthering such activities."
Simply put, money laundering involves taking "dirty money" acquired through criminal means and trying to "clean" it by running it through a financial institution to make it look legitimate.
The "tripwire" for a money laundering offense is when the money obtained through criminal activity is processed through a financial institution.
The crime of money laundering occurs when someone conducts or attempts to conduct a financial transaction, or multiple transactions, within a specific time exceeding the following values:
- Over $5,000 within seven days.
- Over $25,000 within 30 days.
Money laundering activities often involve "layering," a term used to describe the process of trying to camouflage the source of the proceeds of crime by making it appear like the funds came from a legitimate source. This can involve multiple transactions and complex financial arrangements.
Sometimes, money laundering schemes involve using money orders and wire transfers to conceal dirty money through a legitimate financial system. These schemes can be intricate and sophisticated, underscoring the need for vigilance and understanding of these complex schemes.
They often involve organized crime rings that funnel illicit funds into shell companies, offshore banking accounts, real estate, cryptocurrencies, and bitcoin. Understanding these complex schemes is crucial for both law enforcement and individuals to remain vigilant against such criminal activities.
What Factors Must Be Proven to Convict You?
To secure a conviction for money laundering under Penal Code 186.10, the district attorney must prove all the elements of the crime beyond a reasonable doubt. These elements include your involvement in a financial transaction, the origin of the money, your knowledge of the money's origin, and your intent to facilitate criminal activity. Understanding these elements is crucial for your defense:
- You completed a financial transaction. The prosecution (DA) must show that you were involved in one or more financial transactions. This could include depositing money into a bank account or transferring funds between accounts to disguise the source.
- You were involved in the criminal proceeds. The money in the transaction must have come from illegal activities, such as linking it to drug sales, fraud, theft, or other criminal enterprises.
- You knew the origin of the money. The prosecutor must demonstrate that you knew the money involved in the transaction was derived from illegal activity. Notably, this crucial element can be difficult to prove and often relies on circumstantial evidence, such as your conduct or statements.
- You had the intent to facilitate criminal activity. This also includes concealing the source of the money. The DA must show that you acted with intent to facilitate further criminal conduct or to conceal the illegal origin of the funds. In context, this 'intent' refers to your state of mind when the transaction occurred and can also be proven through your actions or statements indicating awareness.
What are Related Offenses?
Several California crimes are related to Penal Code 186.10 PC money laundering, including the following:
- Laundering drug money - Health and Safety Code 11370.9 HS. This statute makes it a crime to launder the proceeds of an unlawful drug sale or drug trafficking. Laundering money under this statute is in the same manner as laundering under PC 186.10. Proving intent can be difficult.
- Freeze and seize penalty enhancement. - Penal Code 186.11. This is a penalty enhancement that includes an additional consecutive state prison term of one to five years if you are convicted of two or more fraud or embezzlement-related felonies in a single case involving over $100,000.
- Federal money laundering laws - 18 U.S.C. 1956 and 1955. A federal money laundering crime can occur when you transfer money from criminal activity into legitimate channels and attempt to disguise the illegal source of the funds. You can be found guilty under federal law if you know the money involved in a financial transaction came from the proceeds of unlawful activity or conduct a financial transaction involving money from unlawful activity. This statute prohibits all types of money laundering schemes, including tax evasion and funding terrorists. A conviction for violating this law carries up to 20 years in federal prison.
What are the PC 186.10 Penalties?
As noted above, money laundering is a "wobbler" in California that can be prosecuted as either a misdemeanor or a felony, depending on the following:
- The circumstances of the case.
- Your criminal history.
- Amount of money involved.
If you're convicted of a misdemeanor violation of PC 186.10, you could face:
- A fine of up to $1000.
- Up to one year in county jail.
If the crime is charged as a felony, the penalties are more severe and will depend on your prior history and the amount of money transacted. A felony money laundering conviction carries the following punishments:
- A first offense includes a fine of up to $250,000 or twice the value of the property transacted, whichever is greater.
- Subsequent convictions increase the fines up to $500,000 or five times the value of the property transacted.
- You can face incarceration of up to four years.
Additional terms of imprisonment can be imposed based on the total value of the transactions, such as the following:
- $50,000 to $150,000 carries one extra year in prison.
- $150,000 to $1,000,000 carry an extra two years.
- $1,000,000 to $2,500,000 carry an extra three years.
- Over $2,500,000 carries an extra four years.
Notably, under PC 1170(h), California's realignment program, your sentence can be served in county jail rather than in state prison.
You should also know that Penal Code 186.10(b) PC allows multiple transactions to be charged as separate offenses, meaning you can face multiple counts of money laundering and face sentencing for each one.
What Are the PC 186.10 Defenses?
Suppose you are facing money laundering charges. In that case, a California criminal defense lawyer can use different strategies to challenge the charges, such as below.
Perhaps we can argue there was a lack of knowledge. Maybe we can demonstrate that you reasonably believed the funds were legitimate or you had no knowledge of their criminal origins. This DA must meet the burden of proof for a conviction.
Perhaps we can argue that there was no criminal activity, and the money involved in the questionable transactions did not derive from illegal activities.
Perhaps we can argue police entrapment. Sometimes, law enforcement might engage in entrapment, meaning coercing someone to commit a crime they would not have otherwise committed. If this occurs, it may result in a not-guilty verdict.
Perhaps we can argue that your constitutional rights were violated. Suppose there were any constitutional rights violations during the investigation or arrest, such as unlawful search and seizure.
In that case, the evidence could be deemed inadmissible in court, and the case could be dismissed. For additional information, contact Cron, Israels & Stark, a Los Angeles-based California criminal defense law firm.
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