Financial Investigations
Table of Contents
Chapter 1- Financial Investigations
1.01 Financial investigations
1.02 Geographical Targeting Orders (GTOs)
1.03 Online banks
1.04 Digitizing records
1.05 Computer records and the Federal Rules of Evidence
1.05 The banking system
1.06 The bank regulatory system
1.07 Check processing
1.08 Offshore Financial Centers (OFCs)
1.09 International Business Companies (IBCs)
1.10 Automated teller machines
1.11 E-commerce
1.12 Encryption and electronic money
1.13 Internet electronic communication
1.14 Web sites
1.15 Smart cards
1.16 Bank Secrecy Act
1.17 Access Device Statute
1.18 Right to Financial Privacy Act
1.19 Identity Theft
1.20 Financial interviews of informants
1.21 Investigating Accounting Frauds
1.22 Investigative methods used in tax cases
1.23 Checklist—net worth analysis
1.24 Checklist—bank deposit method
1.25 Checklist—expenditures method
1.25 Audit Privilege & Immunity
1.26 Model subpoena language—financial institution records
1.27 PATRIOT Act § 319(b) subpoenas
1.28 Model subpoena language—corporate records
1.29 Model subpoena language—credit card company records
1.30 Model subpoena language—telephone company records
1.31 Model subpoena language—securities firm records
Chapter 2- Financial Investigatory Resources
2.01 Financial Crimes Enforcement Network (FinCEN)
2.02 Financial Intelligence Units (FIUs)
2.03 Financial Action Task Force (FATF)
2.04 High Risk Money Laundering and Related Financial Crimes Areas (HIFCA)
2.05 Using Suspicious Activity Reports (SARs)
2.06 Confidentiality of SARs
2.07 Terrorism financing indicators
Chapter 3- Tax Records
3.01 Introduction
3.02 Obtaining and using tax information in a non-tax case
3.03 Expanding the availability of tax information to investigators
Chapter 4- Money Laundering
4.01 Overview
4.02 Placement
4.03 Layering
4.04 Integration
4.05 Domestic financial transactions
4.06 Financial transaction—generally
4.07 Financial transaction—four alternative definitions
4.08 "Affects interstate or foreign commerce"
4.09 Satisfying the knowledge element
4.10 Willful blindness
4.11 Proof of knowledge—third party defendants
4.12 Alleging and proving the "knowledge" element—what the defendant must know
4.13 Alleging and proving the "knowledge" element—what the defendant does not have to know
4.14 Conflicting knowledge instructions—avoiding "Stein" problems
4.15 Proceeds of "Specified Unlawful Activity" (SUA)
4.16 Terrorist SUAs and the USA PATRIOT Act
4.17 Specific intent under 18 U.S.C. § 1956(a)(1)
4.18 Intent to promote
4.19 Intent to evade income taxes
4.20 Intent to conceal or disguise
4.21 Intent to evade a reporting requirement
4.22 Attempts
4.23 Aiding and abetting
4.24 Conspiracy to commit an offense under §§ 1956 or 1957— 18 U.S.C. § 1956(h)
4.25 Conspiracy—agreement—knowledge of criminal proceeds
4.26 Conspiracy—overt acts
4.27 Conspiracy—Pinkerton liability
4.28 Multiple object conspiracy
4.29 Circumstantial evidence of a conspiracy
4.30 Venue for money laundering violations
4.31 PATRIOT Act venue provisions
4.32 Venue for money laundering conspiracies
4.33 Extraterritorial jurisdiction
4.34 Approval, consultation and notification requirements
4.35 Databases and public records
4.36 Drafting money laundering indictments
4.37 Using experts and agents as expert witnesses in money laundering cases
4.38 Forfeiture considerations
4.39 Pre-2001 sentencing guidelines for § 1956
4.40 Pre-2001 sentencing guidelines for § 1957
4.41 2001 sentencing guidelines for money laundering offenses
4.42 Sentencing money laundering cases after Blakely v. Washington
4.43 Civil penalties
Chapter 5- International Transportation
5.01 Overview
5.02 18 U.S.C. § 1956(a)(2)(A)
5.03 18 U.S.C. § 1956(a)(2)(B)
5.04 Operation Lost Treasure
Chapter 6- Money Laundering Stings
6.01 Overview
6.02 Elements of § 1956(a)(3)
6.03 18 U.S.C. § 1956(a)(3)—the "representation" clause
6.04 18 U.S.C. § 1956(a)(3)(B)—"belief" that the funds are proceeds of a specified unlawful activity
6.05 Entrapment
6.06 Sting conspiracies
6.07 Undercover operations
6.08 Jury instruction—undercover agents
Chapter 7- Section 1957 Money Laundering
7.01 Engaging in monetary transactions in property derived from specified unlawful activity
7.02 Monetary transaction
7.03 Criminally derived property
7.04 Knowledge
7.05 The $10,000 requirement—tracing
7.06 The $10,000 requirement—aggregation
7.07 Comparison of §§ 1956 and 1957
Chapter 8- Wire Transfers
8.01 Overview
8.02 Elements of a funds transfer
8.03 Fedwire
8.04 Clearing House for Interbank Payments System (CHIPS)
8.05 Society for Worldwide Interbank Financial Telecommunications (SWIFT)
8.06 Wire remitters
8.07 Wire tranfers as money laundering violations—generally
8.08 Wire transfers that violate 18 U.S.C. § 1956
8.09 Wire transfers that violate 18 U.S.C. § 1957
8.10 Evidentiary issues regarding wire transfer records
Chapter 9- Currency Reporting Statutes
9.01 Currency reporting violations
9.02 Pattern jury instruction— exporting monetary instruments
9.03 Structuring
9.04 Sample indictment—structuring
9.05 Pattern jury instruction—structuring
9.06 Bulk cash smuggling
9.07 Unlicensed money transmitting businesses
Chapter 10- Mail and Wire Fraud
10.01 Introduction
10.02 A unitary statutory structure
10.03 Success irrelevant
10.04 Scheme defined
10.05 Intent to defraud is required
10.06 Intent to use mails not necessary
10.07 The "in furtherance"
10.08 Mailing requirement
10.09 The materiality requirement
10.10 Status of victim
10.11 Failure to disclose
10.12 Generally no need to cite 18 U.S.C. § 2
10.13 Single vs. multiple schemes
10.14 Withdrawal
10.15 Multiple counts
10.16 Venue
10.17 The deceived and the defrauded
10.18 Honest services
Chapter 11- Correspondence Accounts
11.01 Overview
11.02 Correspondent banking problems
11.03 Summary of conclusions
11.04 Recommendations
11.05 PATRIOT Act § 311—"Special measures for jurisdictions"
11.06 Due diligence requirement
11.07 Correspondent accounts with shell banks prohibited
11.08 Forfeiture of correspondent accounts—foreign banks and the innocent owner defense
11.09 Using § 319 of the USA PATRIOT Act to forfeit correspondent accounts
11.10 PATRIOT Act § 319(a) (18 U.S.C. § 981(k))
11.11 PATRIOT Act § 319(b) (31 U.S.C. § 5318(k))
11.12 Bank records
11.13 Criminal compliance programs
Chapter 12- Corporations
12.01 Overview
12.02 Corporate criminal liability
12.03 Corporate privilege issues
12.04 Contacts with represented parties
12.05 Indictment
12.06 Charging corporations – generally
12.07 Charging corporations – factors
12.08 Special policy concerns
12.09 Pervasiveness of wrongdoing
12.10 Corporate past history
12.11 Cooperation and voluntary disclosure
12.12 Corporate compliance programs
12.13 Restitution and remediation
12.14 Collateral consequences
12.15 Non-criminal alternatives
12.16 Selecting charges
12.17 Plea agreements with corporations
12.18 Taking corporate guilty pleas
12.19 Sarbanes-Oxley
12.20 Federal securities laws
12.21 Corporate bookkeeping practices
12.22 Jury instructions: corporate responsibility
12.23 Jury instruction: personal responsibility of corporate agent
12.24 Sentencing
12.25 Market capitalization as the measure of loss
12.26 Professional responsibility issues in corporate fraud matters
Chapter 13- Common Financial Scams
13.01 Introduction
13.02 Accounting Fraud
13.03 Nigerian Fraud
13.04 Prime Bank/High Yield Investment Schemes
13.05 Internet Investment Fraud
Chapter 14- Asset Forfeiture
14.01 Introduction
14.02 Forfeiture basics
14.03 Administrative forfeitures
14.04 Civil forfeitures
14.05 Criminal forfeitures
14.06 Forfeiture of terrorist assets under the PATRIOT Act
14.07 PATRIOT Act forfeitures—18 U.S.C. § 981(a)(1)(G)
14.08 PATRIOT Act forfeitures—civil vs. criminal forfeiture
14.09 Civil forfeiture procedures under the PATRIOT Act
14.10 PATRIOT Act forfeitures and IEEPA
14.11 PATRIOT Act forfeitures of property intended to be used to commit terrorism
14.12 PATRIOT Act forfeitures—reverse money laundering and 18 U.S.C. § 1960
14.13 PATRIOT Act forfeitures—18 U.S.C. § 981(k)
14.14 Obtaining a criminal forfeiture order
14.15 Property "involved in" a money laundering offense
14.16 Application of the excessive fines clause
14.17 Choosing the right transaction
14.18 How to collect the forfeiture judgment in a criminal case
14.19 Civil forfeiture in money laundering cases
Chapter 15- Alternative Remittance Systems
15.01 Overview
15.02 Colombian Black Market Peso Exchange (CBMPE) — generally
15.03 Money brokers
15.04 Money remitters
15.05 Hawala
15.06 Why use Hawala?
15.07 Hawala and terrorism
15.08 Hawalas—law enforcement response
15.09 Chinese/East Asian and other systems
15.10 Suggestions for conducting Hawala investigations
Chapter 16- Common Defenses
16.01 Overview
16.02 Culpable mental state defenses – generally
16.03 Culpable mental defenses - drug cases
16.04 Intent to distribute
16.05 Good faith defense
16.06 Good faith instruction
16.07 Advice of counsel defense
16.08 Advice of counsel instruction
16.09 Willful blindness
16.10 Insanity
16.11 Insanity - scope of expert testimony
16.12 Insanity - jury instruction
16.13 Insanity - special verdict and commitment
16.14 Mental competency to stand trial distinguished
16.15 Diminished capacity
16.16 Entrapment – generally
16.17 Entrapment as a matter of law
16.18 Derivative entrapment
16.19 Outrageous government conduct
16.20 Public authority
16.21 Entrapment by estoppel
16.22 Classified Information Procedures Act (CIPA)
16.23 The drug-addict defense
16.24 The buyer/seller defense
16.25 Duress
16.26 Alibi
16.27 Statutes of limitation defenses
16.28 Self-Defense
16.29 Aggression and mutual combat
16.30 Reasonable force, deadly force
16.31 Immediate or present danger
16.32 Duty to retreat
16.33 Defense of third persons
16.34 Imperfect self-defense
16.35 Battered woman syndrome
16.36 Justification and excusable homicide
16.37 Justification – choice of evils
16.38 Attempt
16.39 Lesser included offenses