Unlike the BSA, the MLCA targets criminal offenders directly by prohibiting money laundering and transacting funds derived from “specified unlawful activity,” a predicate crime.  Accordingly, the MLCA is not an enforcement tool commonly used against financial institutions subject to the BSA.

Elements of Basic Domestic Money Laundering

An individual or entity is prohibited from 

1. conducting or attempting to conduct financial transactions
2. involving the proceeds of “specified unlawful activity”
3. knowing that the proceeds are criminally derived
4. with the intent to promote that specified unlawful activity; or with the intent to violate certain tax laws; or with knowledge that the transaction is designed to conceal or disguise the location, source, ownership, or control of the proceeds of specified unlawful activity; or with knowledge that the transaction is designed to avoid a reporting requirement under federal or state law.¹

Elements of International Money Laundering

An individual or entity is prohibited from 

1. transporting or attempting to transport funds in or out of the US
2. with the intent to promote “specified unlawful activity”; or 
3. with knowledge that the property involved represents the proceeds of unlawful activity and knowledge that the transport is designed in whole or in part to conceal or disguise the location, source, ownership, or control of the proceeds of specified unlawful activity, or to avoid a reporting requirement under federal or state law.²

For each money laundering offense, the government must also prove a jurisdictional nexus, either that the financial transactions subject to prosecution have at least a de minimis effect on interstate or foreign commerce, or involve a financial institution that has a de minimis effect on interstate or foreign commerce.

Specified unlawful activities include over 250 crimes in six categories: (1) most RICO predicate offenses; (2) certain offenses against foreign nations; (3) acts constituting a criminal enterprise under the Controlled Substances Act; (4) miscellaneous offenses against persons and property; (5) federal health care offenses; and (6) federal environmental offenses.  For a complete list, see 18 USC § 1956(c)(7). 

The government is not obligated to trace the funds to a particular specified unlawful activity.  In other words, the government is not obligated to prove the elements of the predicate crime.  Instead, the government may sustain its burden through circumstantial evidence leading to the conclusion that the funds came from the specified unlawful activity.³

The government is not required to prove that the defendant knew that the property was derived from a specified unlawful activity, only “that the person kn[e]w the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under state, federal, or foreign law, regardless of whether or not such activity [constitutes specified unlawful activity].”⁴  Knowledge may be inferred from evidence of willful blindness—that the defendant intentionally avoided knowing that funds were criminally derived property.  For more on knowledge and willful blindness, see here.

Elements of Criminal Spending

An individual or entity is prohibited from 

1. engaging or attempting to engage
2. in a financial transaction exceeding $10,000
3. knowing the property is criminally derived
4. if the funds are in fact derived from “specified unlawful activity.”⁵ 

The government must also prove a jurisdictional nexus, either that the offense took place in the US or a special maritime or territorial jurisdiction of the US, or that the offense took place outside the US but involved a US person as that term is defined in the statute.  In addition, the financial transaction must take place in, or affect, interstate or foreign commerce.

The knowledge requirement is the same as that for the basic domestic and international money laundering offenses.