xv
The year 2011—October 27, in particular—marks the 25th
anniversary of the passage of the Money Laundering Control
Act of 1986, Public Law 99-570. There have been a lot of
changes in those 25 years, including amendments to the law,
the addition of new underlying crimes, court decisions inter-
preting the statute in ways favorable to the government or
limiting the scope of the act, but most in law enforcement
would say that the law has become an important tool in com-
bating criminal activity.
One of the most signicant changes over the years has
been the steady extension of the reach of the statute. Very
few people, even those familiar with the history of the statute,
remember that the Money Laundering Control Act was not
enacted as a stand-alone law, but rather was a part (Subtitle H)
of The Anti-Drug Abuse Act of 1986. This placement illus-
trates a common view of the money laundering problem at
the time. True, the law prohibited the laundering of money
derived from a number of so-called Specied Unlawful
Activities (SUAs), but in the early days of its implementation,
investigators focused on the vast prots of the illegal drug
trade. My rst money laundering case (the rst brought in our
judicial district) targeted a multistate cocaine trafcking orga-
nization that laundered prots through a car dealership front.
The majority of the cases led in the early years also had drug
sales as the underlying SUA, but this trend didnt last.
Cases involving drug money are still important today, but
headlines in recent years have announced money laundering
indictments in multibillion-dollar fraud schemes, environmen-
tal crimes, and for many of the SUAs added since 1986. At
this writing, at least 260 crimes are listed as SUAs, and more
will probably be added this year. In fact, the Asset Forfeiture
and Money Laundering Section (AFMLS) of the Justice
Department is examining ways to expand the statutes reach
to any crime that is a “domestic felonyunder federal law, as
well as to foreign crimes that have an equivalent in American
law. If these changes are enacted, the concept of the SUA will
cease to exist, replaced by a prohibition of the laundering of
the proceeds of pretty much any federal crime. Measures to
that effect are already on the books in many states, which
essentially reach any criminal act under state law.
That major change and even the gradual expansion of the
statute over time create new opportunities and challenges
for law enforcement. Some federal agencies, notably the
FBI, DEA, IRS, and Customs Service, got a lot of practice
investigating money laundering during the law’s rst 25
years, developing effective methods and techniques in use
today. The Bureau of Justice Statistics reported in 2003 that
between 1994 and 2001, 18,500 persons faced a money-laun-
dering-related charge in federal court. Most of those cases
were brought by agencies of the Departments of Justice and
the Treasury, but as the list of SUAs got longer, other agen-
cies were given a stake in the money laundering gameone
that, as time went by, everyone played for higher and higher
stakes. The money, as a Texas hold em player might say, is
getting very serious. Multimillion-dollar money launder-
ing cases are no longer uncommon, and some of the recent
fraudsBernie Madoffs being the most widely publicized
involve billions, even tens of billions, of dollars. By expand-
ing the scope of the money laundering law and by broadening
the reach of federal forfeiture statutes, Congress brings more
law enforcement agencies into a crowded eld, but one that is
much more hazardous for the criminal.
With this opportunity come those challenges mentioned
earlier. Investigators whose jurisdictions included postal or
environmental or food and drug crimes now have the chance
to pursue violators who are laundering their illegal prots
—and to go after those prots as well. The many investigators
who pursue fraudsters may also have a fresh line of attack
and new charges to pursue. This is obviously exactly what
Congress intended by expanding the scope of the money laun-
dering law, but practical obstacles remain, especially for those
who are new to the money laundering arena and may be unfa-
miliar with the rules of the game or the players techniques.
For those who are hoping to develop their knowledge of this
crime and the means needed to investigate it, youve come
to the right place; this book was written for you. As the title
states, this book is a guide for criminal investigators, and
the concepts and techniques outlined herein apply equally to
detectives investigating drug violations as part of a federal task
force, special agents tracking illegal polluters or perpetrators
of fraud, or those tracking the terrorist nancing threat.
These changes werent the only important developments
on the money laundering front over the past quarter of a cen-
tury. During that time, Congress provided law enforcement
with additional tools, such as regulations under the Bank
Secrecy Act (BSA) that made money laundering easier to
detect, investigate, and prosecute. In April 1990, the Treasury
Department’s Financial Crimes Enforcement Network
(FinCEN) went operational and has since become the nations
primary nancial intelligence resource; its role has expanded
to include participation in international intelligence coor-
dination and administration of the BSAs provisions. Since
1986, not just FinCEN, but also law enforcement generally
got better at processing nancial information, and the exten-
sion of the BSA to nonbank nancial institutions and other
businesses meant that more entities report the types of trans-
actions commonly seen in money laundering schemes. This
intelligence has proven invaluable to investigators, and an
entire chapter of this latest edition is devoted to exploring the
ways and means by which it can be exploited.
Preface

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